Is Monster Worldwide Just Sick, Or Is It Dying? (MWW, LNKD) - 24/7 Wall St.

Monster Worldwide, Inc. (NYSE: MWW) should have been cleaning house during the latest jobs recovery. The company and a couple of competitors destroyed the jobs classified business for just about every newspaper and print publication out there over the last decade or so. Who finds jobs in the newspaper now, let alone who knows where to even buy a newspaper now. Victory for Monster! Not quite, or at least not anymore.

Monster Worldwide is getting smashed after its earnings report. The earnings were shy of estimates ($0.11 per share versus $0.12 expected) but revenues fell by 2% to about $250 million ($259.15 consensus). We would note that the company decided to no longer engage in certain revenues related to its arbitrage lead generation business; excluding this it looks like revenue would have risen 2%. Most important is the guidance: $0.00 to $0.04 EPS versus $0.10 consensus; revenues down 3% to 7% year over year. The company further noted that bookings and expected growth rates exclude the impact of the arbitrage lead generation activity ($11 million in the Q1 bookings a year ago).

Monster Worldwide is under systemic business pressure because so many jobs are now found through social media and due to more specialty sites. If you are a high-earner, a financial professional, a biotech professional, a journalist or in the media, or even a freelancer, there are now specialty sites which are more tailored to your field. LinkedIn Corporation (NYSE: LNKD) and other social media sites have also taken over in job searches. And what about “The Poor Man’s Monster” where people get to post jobs on Craigslist?

Imagine this, you are laid off or cannot take working at your current job now and decide to blast off on your Facebook page or to your LinkedIn community, “Hey, who has job openings or knows of any in _______?” These are your friends and professional community contacts (supposedly) so chances are they won’t just give you a number to a Human Resources department to send in a resume with the rest of the general population.

Monster will not likely die. Unfortunately, its relevance on a very broad scope in the future is facing secular pressures that are unlikely to abate. Shares are down 17.5% at $7.41 against a 52-week range of $6.34 to $21.62. Shares are now close to the lows put in during early 2009 just to show how bad things are being treated. Monster was nearly a $50.00 stock before the recession pressures came.

To make matters worse, analysts are now going to have to greatly dial-down their 2012 earnings and revenue growth targets to reflect what may be negative rates. This is where a value stock on the surface acts more like a value-trap in reality. Again, it won’t die. It just has secular trends working against it.


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