NEW YORK (TheStreet) -- BazaarVoice Inc. BV plunged 14.67% to $7.04 by market closed on Friday, down $1.21 from its previous close of $8.25.
The stock had a volume of 2,803,188, well above its average volume of 540,610. BazaarVoice, which aids companies in running their online consumer reviews, hit a high of $7.30 and a low of $6.94 for the day, and has a one-year high of $11.50 and a one-year low of $6.37.
The dive occurred after a federal court ruled against the company's $168.2 million acquisition of its chief rival, PowerReviews . The court said that the deal could result in one company controlling the online product rating and review market. The U.S. Justice Department sued BazaarVoice in 2013, called its deal anti-competitive and tried to force the company to sell some assets.
Federal judge William Orrick said in his ruling dated Jan. 8, which did not get filed into the federal court Web site until late Thursday, that Bazaarvoice violated the law by acquiring its only true competitor, which could likely cause a lack of competition within the market.
TheStreet Ratings team rates BAZAARVOICE INC as a Sell with a ratings score of D. The team has this to say about its recommendation:
"We rate BAZAARVOICE INC (BV) a SELL. This is driven by a number of negative factors, which we believe should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks we cover. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income, disappointing return on equity, weak operating cash flow, generally disappointing historical performance in the stock itself and feeble growth in its earnings per share."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Internet Software & Services industry. The net income has significantly decreased by 25.9% when compared to the same quarter one year ago, falling from -$11.24 million to -$14.15 million.
- Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Internet Software & Services industry and the overall market, BAZAARVOICE INC's return on equity significantly trails that of both the industry average and the S&P 500.
- Net operating cash flow has significantly decreased to -$12.57 million or 203.52% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
- Reflecting the weaknesses we have cited, including the decline in the company's earnings per share, BV has underperformed the S&P 500 Index, declining 20.96% from its price level of one year ago. The fact that the stock is now selling for less than others in its industry in relation to its current earnings is not reason enough to justify a buy rating at this time.
- BAZAARVOICE INC's earnings per share declined by 18.8% in the most recent quarter compared to the same quarter a year ago. The company has reported a trend of declining earnings per share over the past year. However, the consensus estimate suggests that this trend should reverse in the coming year. During the past fiscal year, BAZAARVOICE INC reported poor results of -$0.93 versus -$0.43 in the prior year. This year, the market expects an improvement in earnings (-$0.27 versus -$0.93).
- You can view the full analysis from the report here: BV Ratings Report
Select the service that is right for you!COMPARE ALL SERVICES
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
- 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 + Doug Kass + 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV