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Skullcandy, Inc. (SKUL) Message Board

  • onepoint272 onepoint272 Aug 4, 2012 1:51 PM Flag

    What's wrong with SKUL?

    Like I thought, the weak post-earnings AH trade bode poorly for SKUL.

    Premarket, it put in a high of $16.00 and then opened at $15.50 and immediately sold off to $14.10 and closed at $14.72. Hmmmm, not impressive, not at all.

    It should have rallied. So, fundamentally speaking, something is wrong?

    Don't tell me why it should have rallied, or why it's going to rally next quarter, rather, tell me why it didn't rally; tell me what's wrong.

    Because I'll tell you what, this thing is just not cutting the mustard with serious investors. They're going to shag it, big time.

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    • Since the fundamentals for SKUL remain excellent, it really does not matter whether sellers are still selling. They cannot know anything that was not revealed in the PR and discussed at the CC. They were probably panicked by the RJ lowering of target to 20. Anyone who listened to the CC is unlikely to agree with RJ, and anyway, why does their 20 target make the stock worth less than 15?

      My view is that SKUL will beat its max $300 M revenues and max $1.20 EPS for 2012 estimate.

      • 1 Reply to hottubber99
      • I agree Hot Tub... We will have to wait until Feb of 13 to see, but us longs have held on tight so far.

        Once the dust clears from last week, I'm sure there will be some buying and short covering...

        We are just a bats hair from getting into 15 and there will be more short covering and buying as Analysts reiterate and raise their TP's.

        A couple of positive notes from the company and product launch's...

        In the meantime, no matter what, this company is profitable... Low P/E for it's growth and earnings history...

        No moonbeams just sunrises ahead...

    • Thanks TF for posting the CC quote... I usually post from my iPhone and it is a little tedious switching around between screens.

      That's a lot of doors... I will have to keep my eyes open for the 2xl brand as well as Skullcandy and interested in brick and mortar launch for Astro...

      Looks like I will be doing s little shopping (market) research... :)

    • I was going to say that second sentence was wrong but I just went over the CC and saw it.

      "Jeremy Andrus

      So 2XL is a brand that we have began to put some additional focus on from a product perspective. And those new models have just started to launch. It's a price point brand. It's a derivative or sub brand of the Skullcandy brand and we use it for the doors that we don't think make sense for the Skullcandy brand. It tends to find itself in drug and convenience channel. We've got a number of doors. Currently, customers such as Walgreens and Rite Aid. Current door count in the U.S. is over 10,000 doors. And we certainly see additional opportunity going forward."

    • One thing I got out of the CC was that the gross margin was like 2% lower year over year BUT was higher then the first quarter (correct me if I am wrong). Andrus and Ross reiterated that they were near the end of old product inventory, makIng strides with new packaging and cross-over to the over the ear sets. Also, the high end Astro product line margins have increased substantially.

      The other thing I picked up was that they do have the low end 2xl product line (www.2xl.com). Andrus remarked on Walgreens and Rite Aid as customers and 10,000 doors outside the core Skullcandy and Astro lines.

      This company is positioned well across the board.

      The management changes are IMO flushing out some of the younger original management for experienced market people to grow this company.

      They have brought in people with Nike, HP and HTC experience. I would trade that experience for the younger core group any day as this company goes from a niche company to international exposure.

      I also noted from the CC that Ross stated they were going to split Domestic and International numbers out next quarter. This should give us more transparency into growth.

      OP, we Bulls do look all alike... Doing our homework... I am not a firm believer in charts when a stock like this is so minipulatrd by market makers and brokers.

      When the EPS continues to rise, this stock will gather steam purely on fundimentals.

      Go long - be strong - go SKULnation!

    • Reason why jeffries lowered TP from 22-20 is most likely b/c of this:

      "Finally, let me conclude with our outlook for 2012. As mentioned earlier on the call, we continue to see a shift towards on-ear and over-ear products. While this is positive for sales and ASPs, on-ear and over-ear products generally carry a lower gross margin than in-ear buds. Gross margin is now expected to be flat on a full year basis. The second half gross margin is exceeding the first half.

      On a quarterly basis, we expect third quarter gross margin to be roughly flat sequentially from second quarter gross margins."

    • be that as it may, that's only 1 analyst out of 10 others.

      Keybanc:
      KeyBanc reiterates a 'Buy' on Skullcandy (NASDAQ: SKUL) price target of $21.00.

      Analyst, Edward Yruma, said, "Skullcandy’s 38.2% revenue growth and 59.9% net income growth in the 2Q point to the Company's strong execution within the growing headphones category...While there have been elements of volatility to SKUL’s fairly short tenure as a public company (management changes, European distributor acquisition, refinement of the business model), we believe that the Company is well positioned to take advantage of an attractive, and growing, end market. We are raising our 2012 EPS estimate from $1.17 to $1.18."

      DA Davidson maintains a 'Buy' on Skullcandy (NASDAQ: SKUL) price target of $26.00.

      Analyst, Andrew Burns, said, "SKUL reported revenue and EPS of $72.4 million and $0.24, which compares to consensus expectations of $65.6 million and $0.22 and our estimates of $67.1 million and $0.23. Overall, revenue grew 38%, fueled by 34% domestic growth, 60% international growth and 23% online growth...Our 2012 and 2013 revenue estimates tick up to $299.7 million and $359.7 million, respectively, while our EPS estimates remain $1.16 and $1.43."

      The difference between these two analyst and Jeffries is that Jeff is only lowering due to margins but these two other analyst are looking at the overall, the EPS.

      I think that's what should be looked at also for growth, no?

    • Jefferies maintained its "buy" rating on the stock, but lowered its price target to $20 from $22, saying its expects lower margins in the back half of the year due the company's continued shift to lower-margin products.

    • Definitely disappointing. The Jefferies analyst put out a sort-of downgrade (!) in the form of a lowered target right before the bell, sucking out the momentum and killing the chance of a squeeze. Hard to know what would have happened otherwise. If I was an analyst with a Buy rec I would be looking for excuses to raise the price target. It's a bit surreal.

      Fact is, when the market is set to open much higher, smart money is looking for the "surest thing" to get a pop -- whatever they have picked. Something semi-hot but that maybe ended the previous day a little oversold. The Jefferies analyst may have made SKUL too risky for traders when they were focusing on finding a sure thing. Hopefully our day will come soon. To someone who is a somewhat naive outsider, the prospect of a short squeeze seems like such a no-brainer. You would think the longs could pull it off without having to collude. Maybe next week will be better.

      If there is a problem it is that the short's story has too many people spooked. Have to hand it to them on their bravado I suppose.

    • Yep....If I were you I would double down and take your life savings a short some more. Looks like a crap company to me. Bad earnings, bad management, bad growth, bad product, sales are down and probably looking at bankrupcy.

 
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