UPDATE: Benchmark Lowers PT on Blue Nile on Disappointing 4Q12 Results
In a report published Wednesday, Benchmark Company reiterated its Hold rating on Blue Nile (NASDAQ: NILE), but lowered its price target from $41.00 to $28.00.
Benchmark Company noted, “Blue Nile (NILE-Hold, PT from $41 to $28) reported a disappointing holiday quarter, with 4Q12 revenue of $136.1 million, up 21% y/y, falling short of consensus at $145.6 million, which was already below the mid-point of guidance at $146.5 million. The continued mix shift to engagement, along with ongoing aggressive spend on customer acquisition despite limited traction in the non-engagement category, resulted in just 7% y/y EBITDA growth to $9.1 million, with margins compressing by 90bps y/y. A slightly higher tax rate (35% vs. 34% estimated) contributed to EPS of $0.39 compared with consensus at $0.47. While Blue Nile is still in the very early stages of its turnaround plan, muted holiday sales along with disappointing guidance for 2013, including both revenue and EPS coming in below expectations, may cast some uncertainty on the timing of any sustainable recovery and long-term potential for meaningful margin expansion.”
Blue Nile closed on Tuesday at $30.97.
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