FBR Upgrades Monster Worldwide, Says It Benefits From 'Upswing in Job Creation'

FBR & Co. upgraded Monster Worldwide, Inc. MWW Wednesday from Market Perform to Outperform and raised its target price from $4.50 to $6.80 following the company's Q4 earnings release.

Analyst William Bird wrote that the fourth quarter’s “bookings improvement strongly suggests that MWW is participating in the cyclical upswing in job creation.” The company saw bookings grow by 8 percent in North America while Asia grew 9 percent and much of Europe was flat.

Bird noted that two consecutive quarters of bookings improvements increases the “potential for positive CC revenue growth before year-end, constructive for multiple expansion from MWW’s lowly 3.9x 2016E EBITDA multiple (15 percent FCF yield).”

The note also cited 11 percent growth “for the first time in recent memory” in the company’s core job posting products. MWW will also expand ads on Twitter and is beta testing a new pay-per-click flexible spending model.

The firm’s upside scenario called for 4.8 percent revenue which could result in a $8.05 price for the stock at 5.5x the estimated 2016 EBITDA of $137 million. The downside scenario assumed 0 percent revenue growth but still benefited from an estimated $30 million in cost cutting.

Bird expected that the company “will return to positive revenue growth later in 2015” and that “Europe would need to see more shrinkage in the rate of decline in bookings to see total growth break positive.”

Monster Worldwide, Inc. recently traded at $5.35, up 4.29 percent.