Domain name company isn’t getting much love from Wall Street.
Shares of domain name company Rightside have dropped 15% this week, and hit an all time low of $8.33 in trading yesterday.
Rightside (NASDAQ: NAME) is trading for $8.55 per share this afternoon.
It’s unclear what caused the sharp drop this week. Rightside reported earnings after the bell on November 6, and shares climbed the next day. The company filed its 10-Q with the SEC last Friday. I could not find anything in the SEC filing that seemed like new news.
NAME shares started trading on the NASDAQ on August 4 after the company was spun off from Demand Media. Shares started trading at $15.82 that day, so they’re down about 45%. Rightside’s market cap is now $158 million.
B. Riley analyst Sameet Sinha has a $15 price target on the company’s shares.
Anticareer.com says
This is a low margin company. Through the first three quarters of this year, their Service Cost expense is a whopping 85% of their total revenue compared to last year at this time it was 78% of their revenue. Their other expense buckets are pretty flat except Gain on Assets where they got a $12M good guy compared to last year. Year to date they have a net income loss of $3.3M compared to a loss of $4.9M at this point last year, but take away that $12M good guy which was a one time gain (non-recurring and not part of their daily business performance) and you are left with a very unprofitable company this year.
On their balance sheet, from Dec 31st last year to now cash is down $16M and liabilities are up $44M.
To say they have it all riding on their gTLD plays would be quite an understatement. If their gTLD plays don’t pan out this very easily becomes a sub $100M market cap company.
Andrew Allemann says
Its domain registration business is low margin, new TLDs it owns are much higher margin. You’re right, they need new TLDs to do well.
Jim says
Maybe for starters they should be using a .com and not be using a .co ccTLD.
Image is everything.
BeekeeperDan says
Are you joking? I thought the whole point of rightside was nTlds – .com is so last year dude.
Mark says
.com is the TLD of choice and always will be. It becomes increasingly evident each day with the proliferation of new TLD’s. The general population knows .com — everything else (excepting.org and .net) are club novelties.
Some Guy says
You should travel. Austria only uses .at. Germany only uses .de. Canada uses .ca. Uk is about .co.uk… etc… It’s not all about .com everywhere.