drugstore.com (DSCM)

drugstore.com (DSCM - Snapshot Report) reported better-than-expected top-line results for the first quarter, while EPS were in line. For the second quarter, DSCM expects revenue of $93-$97 million and a slight loss to break even earnings.

We continue to believe that investors should focus on the company strategy to achieve profitable sales growth over the long term. Its strategy includes increasing share in the over-the-counter market, growing its international business, entering new partnership arrangements, and expanding into higher margin product lines.

We think these initiatives could produce strong long-term earnings growth. We rate drugstore.com a Buy with a $3.00 target price.