comScore: Zacks’ Bull of the Day Play

comScore Inc. (SCORSnapshot Report) has seen its estimates rise due to solid subscription revenue growth, improving margins, the launch of their first syndicated Xmedia product, and a large stock repurchase program.  The combination of these factors has made comScore the Zacks Bull of the Day.

This Zacks Rank #1 (Strong Buy) stock is the global leader in measuring the digital world.  This capability is based on a massive global cross-section of more than two million consumers who have given comScore permission to confidentially capture their browsing and transaction behavior, including online and offline purchasing.  Through its proprietary technology, comScore measures what matters across a broad spectrum of behavior and attitudes.

In early May management announced financial results for Q1 15, and they beat both the Zacks Consensus Earnings and Revenue Estimates.  This is the eight consecutive quarter where comScore met or beat both the Zacks Earnings and Revenue estimates.

In the quarter, the company saw Revenues jump 15% y/y, Adjusted EBITDA rose 25% y/y, and margins increased 200 bps y/y.  Further, management closed the WPP transaction, where WPP’s Kantar and comScore joined for a strategic global alliance.  The two companies will combine their data, research, and technology everywhere outside of the U.S. market.  Also, management increased their stock buy-back program to $150 million.

Stock Response to Earnings

The graph below shows the historic price and EPS surprise for comScore Inc.  As you can see the stock has seen a nice boost in price appreciation after each strong earnings release.

Increasing Estimates

Over the past 30 days, earnings estimates for Q2 15, Q3 15, FY 15, and FY 16 have all increased; Q2 15 jumped from $0.04 to $0.13, Q3 15 rose from $0.06 to $0.12, FY 15 rocketed up from $0.01 to $0.42, and FY 16 increased from $0.44 to $0.81.

During their sustained run of earnings beats, the company has posted a 4 quarter average positive earnings surprise of 535.51%.  This indicates that not only does comScore beat expectations, they crush them.

Bottom Line

After achieving record first quarter revenue, Serge Matta, CEO, stated, “As a company, we continue to pursue our mission of making audiences and advertising more valuable, and are doing so during a time of rapid change in the digital media, television and advertising ecosystems.” With solid subscription revenue, the WPP/Kantar transaction, and a stock repurchase program, comScore is well positioned for further growth.
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