This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Market Preview: Big Gain Hangover

The stock is up 23% in the past year, but based on Friday's regular-session close at $49.65, it has pulled back 18% since hitting a 52-week high of $60.71 on July 13. The new year's been good to the shares, though, as Coinstar is up 10.4% so far in 2012, moving solidly above both its 50-day and 200-day moving averages of $46.36 and $46.09, respectively.

Benchmark previewed the quarter last week, and the firm thinks Coinstar, which operates the Redbox DVD rental kiosk business, should beat the consensus view, getting some help from the strategic missteps of rival Netflix (NFLX).

"We believe the upside potential could come from stronger than modeled revenues, benefiting from continued weakness of Netflix share of physical DVD and at Blockbuster as shown by the NPD survey," wrote Benchmark, which is expecting earnings of 67 cents a share from Coinstar on revenue of $501 million.

The firm has a buy rating and a $70 price target on the stock, and it believes DVD rentals at Redbox have remained strong despite Coinstar's decision to raise the price of a one-day rental to $1.20 from $1 to account for costs related to the Durbin amendment. In the future, Benchmark expects Coinstar to be able to lessen impact of the amendment by at least 50%, which could provide upside in 2012 and beyond.

On the other hand, Dougherty & Co., which has a neutral rating on Coinstar with a $55 price target, is below consensus, forecasting earnings of 59 cents a share on revenue of $494 million for the quarter. Expect the firm to be active on the conference call because it's got lots of questions on a "variety" of issues.

"For starters, an update on the search for a new President of Redbox, especially given the recent disclosure that #2 Gregg Kaplan was taking a leave of absence until April?," Dougherty wrote in research issued Friday. "Also, given the expiration of the company's sourcing agreement with Warner Brothers, will the sourcing of discs at retail be a net positive given that the company can now get Warner titles on street date? What is the status of the company's negotiations with processors to lower debit card transaction fees or alternatively change its software to bundle transactions as another method of reducing costs?"

4 of 5

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 17,119.64 +67.91 0.40%
S&P 500 1,984.71 +11.08 0.56%
NASDAQ 4,457.2470 +32.5430 0.74%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto
Advertising Partners

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs