Monday, March 7, 2011

Monster Stock Would Look Better With A Haircut

Monster Stock Would Look Better With A Haircut

Monster Stock Would Look Better With A Haircut

Posted: 07 Mar 2011 10:32 AM PST

Monster is an online job search portal that connects employers with job seekers. Employers pay Monster to list available job openings on the Monster.com website as well as for the opportunity to view resumes of job seekers. Monster also charges job seekers for premium services such as cover letter writing, resume writing and priority resume listing. Monster not only competes with niche players like careerbuilder.com and jobcentral.com, but also with social networks like Facebook, LinkedIn and Craiglist. Monster acquired its previous competitor Yahoo HotJobs in February 2010 in order to boost its customer base.

Monster Provides Brighter Outlook for 2011

Monster recently announced its Q4 2010 earnings in which it projected 20%-25% revenue growth for 2011, and a significant margin expansion in international markets. International markets account for roughly 41% of our $13.63 price estimate for Monster, while North American markets represent about 39%. Our price estimate currently stands about 20% below market price.

Innovative Products Will Drive Revenue Growth

Monster has introduced quite a few innovative products over the last few years. This includes Power Resume Search, an innovative product launched in November 2009 that is based on Monster's patented 6Sense technology. 6Sense technology is much more efficient than traditional resume search technology, and helps recruiters to quickly find suitable candidates (See Better Resume Search Technology Can Help Monster Compete with LinkedIn, Facebook).

According to Monster, the usage of Power Resume Search technology has steadily increased and now represents around 50% of resume searches in North America. [] Monster benefits from the roughly 30% premium pricing it charges customers for this functionality. []

Another product that Monster has recently introduced is its Career Ad Network Direct (CAN Direct). This product allows customers to syndicate their job advertisement directly into Monster's ad network, from which Monster can drive traffic directly to the customer's career website. [] According to Monster, CAN product sales increased 50% between 2010 and 2009. []

These innovations should also help Monster increase its customer base, consequently lifting the number of job postings on Monster's website.

Higher job posting pricing and an increased number of job postings should drive revenue growth for Monster going forward.

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