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Skullcandy, Inc. Message Board

  • onepoint272 onepoint272 Feb 8, 2013 10:42 AM Flag

    Jeffries reiterates Underperform lowers target to $5

    Jefferies noted, “After the close, SKUL announced that CEO Jeremy Andrus has stepped down from his post, effective immediately. Until a permanent replacement is found, the Board has appointed founder and former CEO Rick Alden as Interim CEO. We think this latest management change adds more risk to the SKUL story. Maintain Underperform rating and lower PT to $5 .”

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    • The trouble is, more often than not, their upgrades and downgrades come too late. But thanks to him I have cheap shares to cover my short position.

      • 1 Reply to trevorex000
      • KeyBanc was rather pointed, "......even an inexpensive valuation remains unattractive...." :
        KeyBanc noted, "A series of operational missteps, a changing business model, and now, the departure of CEO Jeremy Andrus further impairs near- and medium-term visibility. Competitive pressures continue to intensify within the space, which could further pressure the earnings model. As such, we are taking a more conservative view on estimates for the time being. A 6.6x 2012 P/E, compared to 20.7x P/E for the high growth retail peer group, is the least expensive in our coverage universe, but at this stage, earnings visibility is so limited that even an inexpensive valuation remains unattractive, in our view."

        DA Davidson said "we don't think sentiment can get any worse...........the potential for a stock buyback and clarity to 2013 numbers can get the stock moving higher".

        But, interestingly, DA Davidson substantially increased their holding from 3900 shares to 56,900 shares as of Dec 31st. So one has to ask, are they talking their book?

    • Interesting. I acknowledge all opinions as these guys aren't stupid, but they're suggesting the company is basically dead and done with a 5 target. But yet Skull's financial position is strong enough to borrow $28 mil (20% of its value at 5 spare price) to buy it's own stock? No bank is making that loan without having done their due diligence on the company...and I'm sure they knew the CEO was out during this process.

      Something has gotta give...very opposing fundamental opinions. Anyway OP, you're in belief these analysts have an agenda, so maybe such a downgrade allows them to buy on the cheap.

      • 1 Reply to chaz16669
      • There assumption is that forward guidance for 2013 is going to be bad. The stock actually has not taken the beating today as it could have (so far) based on all the downgrade and earnings news. There has been so many plunges in this stock since last summer that all this mumble jumble has been priced in.

        I'm itching to hear what the top line revenue numbers for 2012 came in at and if they went at or over 300 million. Also what they have to say in March about 2013 outlook (they will have a full quarter under their belt without saying anything which is dubious at best).

        OP... still have my finger on the trigger... Safety on