CAPS Rating: 4 out of 5

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Member Avatar TMFNinjaPanda (45.81) Submitted: 8/21/2014 10:19:24 AM : Outperform Start Price: $18.05 SALE Score: +8.09

I've been using RetailMeNot for 5+ years and they continue to be the best coupon portal out there. I'm surprised to see that the market has been treating it so unfairly. Definitely a bargain for its current price.


Member Avatar AnkurVarsheny (< 20) Submitted: 8/18/2014 9:10:57 AM : Outperform Start Price: $17.81 SALE Score: +8.27

Why? because online discount coupons now is a real business with lot of potential growth. More and more people are buying things online and before they do they usually check for some online deals. RetailMeNot is the largest website offering online deals. Even after all Google Panda changes crying by analysts I see it as top or second website on Google search results when looking for online discount coupons. It has good potential with organic growth on mobile and website traffic too as more and more people are getting aware of the service.


Member Avatar TSIF (99.96) Submitted: 8/5/2014 11:25:45 PM : Outperform Start Price: $18.63 SALE Score: +1.55

Retail Me, Retail me NOT?

Usually major selloffs from disappointing earnings can take two or three days to settle.
I watched the daily pattern, flipped a few coins, came to nothing conclusive, so got out the dart board.
Again, nothing conclusive, and I had to hurry and patch the walls before the wife got home....I really need to take the dart board outside on good days, or get a bigger cork mounting board...

While I was ruminating, my low limit I was using to "watch with", kicked in and here I am...already a few percent down.

I do get a little magnetic pull from the "use to be syndrome", but I can usually ward it off, and sometimes can even hit the sell off equity with a downthumb, wondering, how it ever was that "high".

There were some hefty anal-yst down grades, and growth has pretty much ground to a halt. The 20% drop in May from RetailmeNot admitting that Google had knocked it's listing advantage down with a change in algorithm was an indicator, but management had acknowledged it and indicated that it would have minimal effect on business......

SO now we have a credibility issue OR do we?? Are expectations out of whack??
"Revenue in the three months ended in June rose 37%, year over year, to $59.5 million, yielding EPS of 8 cents. Analysts had been modeling $60.2 million and 7 cents per share"
So we have a miss of 1% on the top line, but a beat on the EPS?? Doesn't sound bad until you look at the guidance...
"Management forecast revenue this quarter of $53 million to $57 million, below consensus for $62.6 million. For the full year, the company sees revenue of $262 million to $270 million, down from a prior forecast of $276 million to $282 million, and below consensus of $282 million."

So we go from 37% YoY increase to a decrease...sounds to me either they've been "Googalized" or have other problems.

Not sure if my entry is good or not...Good cash on hand, good margins, but right pricing this one may require further downsizing...hard to see this at much higher than $14 on this basis. 50% of float traded today...either need to see some consolidation and basing, or this one could be a tough where is that spackle.


Member Avatar OatMan55 (< 20) Submitted: 6/25/2014 8:00:11 PM : Outperform Start Price: $27.15 SALE Score: -29.52

Solid business model being unfairly treated by the market. Good deal.


Member Avatar investq (98.75) Submitted: 6/15/2014 5:17:43 PM : Outperform Start Price: $27.02 SALE Score: -30.07



Member Avatar marrd (52.30) Submitted: 5/27/2014 2:27:07 PM : Outperform Start Price: $25.46 SALE Score: -27.09

Recent hit taken by Panda 4.0 update is overblown. SEO is something SALE has done in the past, and can do again to overcome the lost traffic. Also, mobile app usage, which is key to the growth of the company moving forward, is unaffected by these fluctuations in Google search traffic.


Member Avatar TMFPencils (99.79) Submitted: 5/22/2014 10:38:21 PM : Outperform Start Price: $24.50 SALE Score: -24.95

RetailMeNot shares were crushed 18.72% today after reports that the company was among the biggest losers following algorithm changes made by Google. While the algorithm changes at Google may jeopardize the digital coupons provider's ability to take full advantage of search engine optimization in the short-term, RetailMeNot's long-term prospects remain intact.

-- What is the algorithm update? --

This week Google rolled out Panda 4.0, an algorithm update that has been discussed since March. Google Panda is a filter implemented by Google in 2011 to limit the ability of sites with poor quality content, such as spam, from getting displayed toward the top of queries made on Google. Google updates the Panda filter every month, so an update to Panda is hardly coming from left field.

Legitimate sites are, however, sometimes affected by the Panda updates and other changes in Google's algorithm. This time around, eBay and RetailMeNot are purportedly the main sites who have seen their search engine hits decrease as a result of the Panda 4.0 update. It seems that RetailMeNot was caught in the estimated 7.5% of search engine queries affected by the Panda 4.0 update.

The Search Engine Journal notes there are accounts of websites affected by previous Panda updates now "seeing significant recoveries." In addition, several accounts suggest "the update has indeed been a little softer and more generous to sites, especially those previously affected."

-- Does this really impact RetailMeNot? --

Approximately 65% of RetailMeNot's website traffic is driven through search engines. Search analytics firm Searchmetrics claims that RetailMeNot's total hits fell 33% after Google's Panda 4.0 update. RetailMeNot responded by issuing a press release stating "these reports greatly overstate the impact on" The press release also emphasizes the crucial point that RetailMeNot has already experienced numerous algorithm changes from various search engine providers since the company's founding in 2007. In other words, this is not exactly something the company hasn't seen before.

Search engines regularly update their algorithms, causing website traffic to fluctuate. Innovative and responsive businesses will respond accordingly and adjust search engine optimization strategies. This is a pretty simple concept but, as in this case, it can provide an outlet for shortsighted traders to panic and jump ship.

Perhaps most importantly, RetailMeNot's press release notes, "It is too early to judge any potential impact of the latest Google algorithm change." Speculation about the Panda 4.0 update's impact on RetailMeNot is just that: speculation. That hasn't stopped the market from hammering shares of RetailMeNot to their lowest levels since the company's IPO in July 2013.

-- RetailMeNot appears strong as ever --

RetailMeNot continues to grow at impressive rates. In the company's most recent quarter (of which TMFBrewCrew posted an extensive summary on this board), total sales expanded 51% to $61.3 million. Sales from mobile devices increased 127% year-over-year to $9.3 million for the quarter. Sales growth shows no signs of slowing, and the company continues to plow cash into research and development. In fact, this quarter RetailMeNot increased research and development funding by 80.42% year-over-year to $10.41 million.

RetailMeNot continues to produce positive free cash each quarter, which has allowed the company to build an arsenal of $196.47 million with only $24.5 million in debt.

RetailMeNot also has a strong employee culture as evidenced by reviews on Glassdoor (a website where employees can anonymously rate their place of work). Employees give the company a solid 4.2/5 rating on Glassdoor. Founder, president, and CEO Cotter Cunningham earns an 89% employee approval rating, reflecting Cunningham's belief in developing an innovative culture and rewarding employees. "We believe people work hard for us," says Cunningham, "so we need to work hard for them."

-- Foolish bottom line --

Even after Thursday's sell-off, RetailMeNot trades at a premium price/sales ratio of 7.23. Investors without a stomach for significant volatility -- as evidenced by how the market treated the stock based on purely speculative reports -- should probably avoid investing in RetailMeNot at this point. The stock will likely trade at a premium for quite some time considering the business increased sales at an average rate of 87.83% annually over the past four years.

If RetailMeNot can continue to expand sales more than 30% annually over the next 3-5 years, there is a good chance the stock will be able to grow into its valuation while beating the market. If the company expands sales at at average pace of 30% annually for the next five years and trades at a P/S multiple of 3 in 2019, the stock would be more than a double from today's levels:

6.38*(1.3^5)*3 = $71.07

Foolish investors should focus on the health of the underlying business. If the Panda 4.0 update really impacts RetailMeNot as negatively as some are speculating, I would be very surprised if RetailMeNot is unable to devise a solution to accommodate and improve upon Google's latest algorithm within a relatively short period of time.

For now, RetailMeNot's business remains intact and the company's actual performance has -- up to this point -- been stellar. I see no reason to panic. Outperform.


Member Avatar LowEnterpriseVal (< 20) Submitted: 5/2/2014 12:34:57 AM : Outperform Start Price: $32.79 SALE Score: -45.61

I use this app on my phone which proves how simple and user friendly it is. Have saved money already and look to expand my usage. Market cap seems reasonable for the size of opportunity. Balance sheet looks good to me


Member Avatar SkepikI (75.15) Submitted: 12/8/2013 3:02:04 PM : Outperform Start Price: $27.75 SALE Score: -38.87

Near its low, following a ridiculous run up post IPO, this may be the time to take a risk on a revolutionary approach with a Management team that looks like it can execute.

This is a trend that seems essential to watch and so I will FORCE myself to watch by investing


Member Avatar TMFBrewCrew (99.58) Submitted: 11/5/2013 10:40:26 AM : Outperform Start Price: $31.85 SALE Score: -51.08

Here's a blog I wrote on why I expect SALE to outperform the market:


Member Avatar MBaes (38.71) Submitted: 9/22/2013 9:52:54 AM : Outperform Start Price: $36.01 SALE Score: -61.76

Over the next couple of years, SALE will continue to pick up speed by providing deals in places where groupon, living social, and open table cannot. I'm not saying it will be on top of its game forever, but it will grow and flourish for the next couple of years for sure!


Member Avatar Hoos1213 (27.87) Submitted: 9/19/2013 10:57:27 AM : Outperform Start Price: $35.75 SALE Score: -59.60

A leader in online coupons and with a very strong name/brand. A very robust business model as well.


Member Avatar cengle777 (< 20) Submitted: 8/30/2013 7:38:00 AM : Outperform Start Price: $32.95 SALE Score: -60.98

With the increase in Internet coupons being utilized and the right CEO bringing in experience of a similar strategy used in the banking industry I think they have the right niche to outperform the industry. The site is getting increased hits which are then translating to sales. Keep in mind, people searching for coupons are ready to buy. Retailers know this and are willing to sacrifice some profit to capture those with cash in hand.


Member Avatar starz188 (99.78) Submitted: 7/19/2013 12:03:10 PM : Outperform Start Price: $27.62 SALE Score: -46.67

They've got the leading coupon site on the web, and check out those margins!

This is essentially a publicly traded affiliate marketer. They're listing coupon offers and collecting commission. Easy peasy.

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