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LeapFrog Enterprises Inc. Message Board

  • superbowl6wins superbowl6wins Sep 3, 2013 9:51 AM Flag

    This is The Kind of News Shorts Love and Act On !

    BMO Capital downgraded LeapFrog after reviewing the new LeapPad Ultra and finding several glitches with the product and concerns that poor reviews will hurt retail demand. Price target lowered to $10 from $15.

    Rumors of bad news is what the "shorts" try to generate weather they are true or not. Today will be their day but remember the LP2 is still outselling everybody and if there is a problem with the Ultra it may cause an increase in LP2's. Bottom line, these are things we can't control and LF is already undervalued. I also think this is an issue LF must address in a "news release" today or tomorrow. They wouldn't do it to protect the PPS but they will protect their market share.

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    • I don't think the recent price drop has been due to the news being reported. I believe the price drop is due to 2012 qtr earnings having a one time gain. The gain misrepresented 2012 earnings and the ttm being reported.

      For example the ttm P/E ratio is being reported as 6.31 by many agencies. This one time gain was not factored by the analyst. IMHO the analyst didn't read the quarterly reports and missed the one time gain. When the one time gains are taken out the 2012 eps, Leap Frog's P/E is increased to 15.73 at today's prices.

      In the last earnings report, 2nd quarter of 2013, the company gave guidance for the upcoming 3rd quarter. This guidance surprised the analyst since it wasn't what the analyst were expecting. For the analyst were relying on what the services reported as the ttm eps.

      I believe the analyst missed this by not doing the work of reading the SEC reports themselves. And are now scrambling to find reasons other then they didn't do their work to blame. There is no reason for an analyst to drop the price target 33% from $15 to $10. Even the excuses given were lame.

      This is just my humble opinion.

    • The concerns aren't invalid, but the stock price reaction today is a bit of an overreaction in my opinion. I don't know how they came up with a new price target that is 33% lower than the old one.

      I was disappointed with some of the initial reviews. Don't discount the power that reviews hold. When I buy something Amazon which I do frequently I pay close attention to the reviews and it has a huge influence on what I buy. They apparently didn't due enough testing before they released it and that is never a good thing. I don't think they want to sell more LP2's instead of Ultras. It's not that simple either since they have to make sure they have the proper amount of each product for the holidays. With more products that task becomes more complicated.

    • The shorts always win with this stock. They pounced on the news that Samsung is competing with LF. That is there entire bet- that LF will face competition and get outsold. And now this downgrade is gold for them. To me it is pure manipulation which is legal for some reason.

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