Don't Move on Move, Inc.

Move, Inc. (MOVE - Snapshot Report) reported revenues of $71.7 million in Q4:FY2007, up 2.6% year-over-year but down 5.2% quarter-over-quarter, missing our estimate of $73 million. GAAP EPS was ($0.03) while on a non-GAAP was $0.02.

The growth in the company's core segment, Realtor.com, has slowed down with a 6% year-over-year growth registered in this quarter versus 15%-30% year-over-year growth over the last couple of years. Currently, the real estate industry is trying to get over the shock of a precipitous decline in home sales activity accentuated by the unprecedented credit crunch in the mortgage market.

Management is re-evaluating its business strategy, and we expect to see significant changes by end-FY2008. The company's CRM software suite and other productivity tools may have the potential to grow and add value through margin improvements, but we do not think that the potential benefits of the CRM platform will grow enough to neutralize the negatives associated with the overall real estate environment in the near term.

Given the challenging real estate market in the U.S. and lack of a near-term catalyst, we think the shares will likely remain range-bound. Accordingly, we continue to rate the shares of MOVE a Hold and have maintained our price target at $3.50, based on applying a P/S multiple of 1.8x to our FY2008 revenue estimate. This multiple is below the median P/S multiple for the industry.

Read the full analyst report on MOVE.