August 15, 2007

LoopNet

Is a MF Rule Breaker and Hidden Gem:

When you look at the one-year return, you might think that the near doubling of LoopNet's stock played a part in going negative, and, in fact, All-Star BrianRuth does think valuation is a concern, particularly in today's market:

High P/E and real estate market exposure looks like a sure way to lose market cap.

Yet LoopNet is in the commercial real estate market, not residential, and the exposure that companies have to the two is completely different. It's not really a fair comparison to put LoopNet in the same circle as homebuilders Beazer Homes (NYSE: BZH) and Hovnanian (NYSE: HOV), or even with a listing company like HouseValues (Nasdaq: SOLD). As LCDRMBH points out, other metrics make LoopNet look strong still:

Profit margin 31%, operating margin 42%. Quarterly revenue growth 46% YOY, Quarterly Earnings growth 48% YOY. Peg 1.3. Intrinsic value estimate around $40, DCF estimate $39, current price at $18. Leader and rapidly growing in the emerging field of online commercial real estate. Best of all, NO DEBT.

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