Move in Challenging times

With the falling real estate market, the Move Inc. stock price has been hammered down in the last one year and is currently trading at $1.78 with a total market capitalization of just over $300 million. The 52-week range for the stock is $1.75 – $6.69.

In 3Q07, the Company reported revenue of $75.6 million, while the EBIDTA was at $7 million. EBITDA margin stood at 9%. The Company’s Real Estate Services revenues increased by 5% Y-O-Y to $55.9 million. Realtor.com grew 6% Y-O-Y in a falling market. Top Producer registered 15% in revenues. The Consumer Media segment experienced a fall of 12% Y-O-Y in revenues but was able to cut EBITDA losses to $80,000 in 3Q07 from $1.7 million in 2Q07.

According to comScore, Realtor.com attracts over 6.5 million monthly unique visitors and is the industry leader with a market share of more than 8%. Move.com had a market share of 2.73%.

The slowdown in the real estate market has forced the Company to put on hold its investments on Welcome Wagon and cut investments in a planned Home/Garden site. However, it plans to invest in technology upgrades to improve its search capability, support for Google gadgets and iPhone.

The Company also intends to open its site to search engines, which will aid traffic growth to its site.

The real estate market is not expected to recover anytime soon. It will take a few quarters for the industry to recover and Move should use this opportunity to organize its house and improve its services so that it is able to capitalize when the real estate market does recover. The fact that real estate ads are moving online will enable the Company to recover faster than the real estate industry.

However, there is no near term trigger for the stock and major media companies like News Corp., Yahoo, etc. could use this opportunity to pick up a stake in the company as it is available at 0.95 times sales.