SellSide Comes to comScore’s Defense

An 11:00 AM conference call today by comScore (SCOR-NASDAQ) with Deutsche Bank's Internet Research Analyst Jeetil is only one example of the Street defending comScore's stock in the wake of a selloff spurred by a competitive threat from Google.

ThinkPanmure is also rallying the troops in a research note today:

We are reiterating our Buy rating and $36 price target on SCOR shares, following a 23% selloff related to Google's entry in the audience measurement market. There are three reasons why we believe Google's new Ad Planner product is unlikely to have a significant impact on comScore: 1) there are already several other "free" media planning alternatives that have yet to impact comScore, 2) Google's measurement methodology is likely to overstate audiences, and 3) a general and significant distrust of Google among media buyers. We envision more than 50% upside in the stock over the next year. ThinkPanmure Research Note

The stock has been on a wild ride since its IPO, but the Google competitive threat is likely to overhang the stock for some time, despite ThinkPanmure's construction posture. However, they are drawing on a historical precedent, pointing out similarities with Omniture (OMTR-NASDAQ):

For investors in SCOR that are concerned about the impact of a “free” product like Ad Planner on comScore, we believe there is no better example than Google Analytics’ impact on Omniture. Google announced that it would be offering a “free” analytics product in November 2005, roughly seven months before Omniture went public.

The threat of a competing “free” product from Google has remained a key risk to Omniture’s business and stock before, during, and after its initial public offering, in our opinion. However, since its IPO, Omniture has been able to add more than 2,000 incremental customers (organic excluding Visual Sciences) and its stock is up more than 3x in two years.

Keep an eye on the stock into the noon hour; it might provide a clue if investors are buying into comScore’s explanation of the ongoing conference call.

comScore has provided plenty of drama for traders since its June 27, 2007 IPO. And given how poorly some other deals have performed, theirs will have to be considered a success, until proven otherwise.
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The content contained represent the opinions of 1440 Wall Street. This commentary in no way constitutes a solicitation of business or investment advice. It is intended solely for the entertainment of the reader, and the author. No position in securities mentioned

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