5. Skullcandy's Target Practice
Could the Wall Street analysts tracking headphone seller
(SKUL - Get Report)
be any less plugged-in?
Skullcandy shareholders got their heads handed to them last Friday after the company reported higher-than-expected fourth-quarter sales, but said it expects a sizable first-quarter loss due to expansion-related expenses and the loss of bankrupt British music retailer
as a major customer. Skullcandy said it now sees a loss of 25 to 30 cents per share in the first quarter and a 30% drop in year-over-year revenue, which translates to around $37 million in sales. Shares closed down 22.5% to $5.21 on the news.
In case you were wondering, analysts on average penciled in a tidy quarterly profit of 5 cents a share for the company in Q1 on revenue of $59.8 million.
Talk about tone deaf! Were any of these jokers listening to the company at all? Because when the music stopped and the stock dropped there was not a chair to be found, just a bunch of useless, after-the-fact downgrades.
cracked SKUL from buy to hold, reducing its price target to $8 from $15.
halved its price outlook to $6 from $12.
Not to be outdone,
Bank of America/Merrill Lynch
slashed its target to $4.50 from $12 a share. And finally
sliced its forecast to $4 from $7.
They may not want to hear it, but Skullcandy's analysts clearly need more target practice. The only thing they are hitting squarely right now -- aside from their own credibility -- is their client's pocketbooks.