Quarterly Revenue Indicates A Start Of Recovery In ValueClick

Analysts at Benchmark maintain their "hold" rating on ValueClick Inc

. The target price for VCLK has been raised from $10 to $11. According to Benchmark, “ValueClick reported decent 2Q10 results and provided modestly better than expected 3Q10 guidance. Surprisingly, an improvement in ValueClick’s comparison shopping segment drove the performance.” VCLK’s 2Q10 total revenue indicated that the company has started recovering. “ValueClick’s best-positioned business, affiliate marketing, grew 10% y/y and contributed 48% of segment income,” the analysts say. “Operating income before depreciation and amortization (OIBDA or EBITDA) was $27 million, down 3% y/y. OIBDA was $0.6 million ahead of our estimate. ValueClick has consistently done well with managing costs and generating cash. At the same time, however, its revenue has proven susceptible to great fluctuation. ValueClick acquired Investopedia, an educational finance website, for $42 million in cash. Investopedia is expected to generate $10 million in revenue and $5 million in OIBDA for the full year 2010, which puts the acquisition at 8.4x OIBDA. We like the concept as this appears to have brand value and therefore more sustainability than ValueClick’s other consumer websites. Investopedia does not rely on search engine marketing to attract its 2 million users,” Benchmark adds.