ValueClick Feels the Impact

ValueClick, Inc. (VCLK) is feeling the impact of declining advertising spending as consumer confidence wanes. This has been reflected in the company's subdued outlook for Q109.

Despite a weak macro economic environment, ValueClick delivered strong Q408 results with improved margins, beating Wall Street as well as our expectation. In the long-term, we believe there is still significant growth opportunity ahead for the Internet advertising industry, but we don't expect meaningful improvement over our six month time frame.

Given the current economic situation, we maintain a Hold rating on the shares of VCLK but raise our price target to $8.50. VCLK is currently trading at a P/E multiple of 8.7x our 2009 earnings per share estimate of $0.90, a discount to the industry and S&P 500. Our price target represents a multiple of 9.4x our 2009 EPS estimate.

Priyanka Poddar contributed to this report.

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