comScore Hit With Macquarie Downgrade After Accounting Issues

COMSCORE, Inc. SCOR has been downgraded by Macquarie Research to Neutral.

Accounting concerns including a further delay in its 10-K filings and share buyback suspension have led to the downgrade, while a postponement of the company's Investor Day also influenced the analyst's view.

Analyst Tim Nollen explained, "We had let slide last week's 8-K announcing a 15-day delay after interpreting this as a minor event […] maybe it's not so minor after all."

"[O]r maybe it is, but there is no further public information nor timeframe on resolution."

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Regarding the company's fundamentals, the analyst noted "no change" that he was aware of.

"We believe comScore is building an intriguing measurement system across TV and digital media as it merges with Rentrak, and this will meet a ready audience among advertisers, agencies and media owners. We model 35 percent EPS growth in 2017 after merger-related dilution in 2016; comScore guided the 2016 outlook down from the S-4 merger filing due to timing of the deal, including some accounting differences between comScore and Rentrak.

"We surmise this, or some other merger-related accounting items could be the cause of the delay here, and it may be benign, but we just don't know […] We prefer to just sit this one out," the analyst concluded.

Revisions

Nollen stated Macquarie is reducing the target price on comScore to $29 from a previously held $47 and downgrading the stock to Neutral, saying, "In the absence of information on the accounting issues or timing of resolution we cannot justify an Outperform rating on the stock.