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Lamar Advertising Co. Message Board

  • investora2z investora2z Jul 16, 2013 11:20 AM Flag

    Margins need to improve

    The average analyst rating for Lamar is hold, and the consensus price target is around $49. The company did not meet analyst expectations in the last earnings as it reported a slightly larger loss per share than consensus estimates. It had reported profits in Q2, Q3 & Q4'12. However, on a yoy basis the loss declined substantially from $22.8 million to $6 million. The revenue increased slightly, and there are expectations that the company may report an EPS of $0.52 for the full fiscal. It has been reporting profits since the last two years, though the net margins remain very low. The company is trading at around 47 times forward earnings fye. 2014. The PEG is 0.68 which indicates that there are expectations of earnings growth over the next few years. However, the debt is high at $2.15 billion, and the cash on books was around $75 million as on March 31. The stock price has moved as per the fundamental performance, and the last earnings led to a correction from the 52 week high. Over the longer term, the stock has appreciated by around 65% over the last one year. Future growth will depend on how the company is able to adapt to the changing world of advertising. There is tremendous competition from social media and other forms / mediums of advertising. New concepts are coming up all the time, and outdoor advertising is likely to face challenges. For example, IZEA (IZEA) runs a marketplace wherein advertisers can pay celebrities and other influencers to blog, pin, tweet, YouTube, Instagram, etc. Lamar is concentrating on increasing the digital billboards to cash in on growth in that segment. Further, its inclination to become a REIT may also be shareholder friendly if the profits increase.

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