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Stock price of online credit provider swings with sector volatility.

If it weren't for the credit crunch, Bankrate (NASDAQ: RATE, Bullboard) would be doing great. As it is, the company is not in bad shape. It provides online service for getting home loans and other credit for consumers and also sells advertising at its own websites.

Bankrate trades at $48.57, which is the middle of its 52-week price range. Recently the stock was beaten up because its earnings forecasts were weak and the firm was downgraded by Needham and Roth Capital.

The first quarter of 2008 was relatively strong. Revenue increased by 91% to $42.5 million over the $22.2 million reported in the first quarter of 2007. Net income increased by 27% to $6.8 million, or $0.35 per share in the first quarter of 2008, compared to $5.4 million, or $0.28 per share in the first quarter of 2007. A lot of the improvement was due to buying new businesses last year. For the year 2008, guidance really was weak with a revenue range of $167 to $172 million.

The market's concerns about the company could not be more simple. The credit crisis will slow operations. Is that true? Probably. Can the company come out the other side of a slowdown? Almost certainly. RATE has a strong balance sheet and is still making money.

These shares will do well as the housing and credit markets begin to recover. What investors have to decide is when that will be.

ABOUT THE AUTHOR
From the news desk of 24/7 Wall St.

This report was prepared by 24/7 Wall St., LLC exclusively for Stockhouse. 

 
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Comments
I am highly impressed that a company of this nature was able to not only survive the credit crunch, but experience nearly double the revenue in the first quarter of 2008. They may want to keep an eye on their margins however, because revenue grew by over 90% but income only grew by 27%, other than that it looks like it can endure the crunch!
Despite being a difficult period as economy wise, the company seems to be doing extremely well. Considering that is stock are above what it was a year ago. Although I would like a bit more stability, and it not changing dramatically from 40 - 55 continuosly.
the link under Bankrate (NASDAQ: RATE, Bullboard) does not work other than that, great article! even if the credit crunch is not over, if RATE has strong books, it will survive
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