The stock is beginning to see improvement, however, as the market becomes a bit less risk averse and growth expectations are being looked at with less skepticism. On Monday, Jefferies upgraded its opinion from hold to buy due to an increasingly positive outlook for the company. The analyst believes that the company is on track to deliver robust earnings and revenue growth in 2008 and is especially encouraged by the fact that over 70% of expected revenue in 2008 was already under contract at the end of the fourth quarter.
This not only gives Wall Street confidence in projecting earnings over the next several quarters, but it also gives management a strong table of data from which to plan expansion projects. These growth initiatives are likely to include additional products launched, international expansion as a larger portion of overall sales, and possibly acquisitions.[1]
Currently, the renewal rate for existing clients is over 90% and management has indicated that pricing pressure has been good. In fact, for each renewal, the company is seeing anywhere from a 5 to 10% increase in the new subscription rate. This points to the fact that despite a weakening economy, businesses are still willing to spend on marketing when they are confident that their investment will pay off.
comScore is working hard to develop products that are attractive and effective, and even expects to launch a new product for mobile internet, serving advertisements on cell phone screens. This initiative will require partnership with at least one of the major cell phone carriers in order to get off the ground, but management is confident that such a pact will be initiated.
International expansion continues to be a strategic decision for the company. While still primarily a US based firm, the company was able to grow its revenue mix to bring 14% of its revenue from overseas, compared to only 11% in the third quarter. As comScore gains name recognition and lands key clients in Europe, it will likely gain momentum in its international rollout.[1]