According to Gleacher & Co., they see United Online (NASDAQ:UNTD) having reached the turning point concerning growth going forward, mostly driven by their Classmates Media business.
Gleacher said, "We believe UNTD is well-positioned to grow total revenue and overall OIBDA in FY11. This, in our view, marks the turning point for the stock, as we believe investors will begin to view UNTD as a growth company rather than one that is weighed down by a declining dial-up business. We note that In FY11, UNTD will no longer face a tough y/y comparison due to its decision to exit the post-transaction marketing business (about $27mil in revenue in FY09) at the end of January in 2010. Also, the magnitude of decline in its dial-up business should be much less than a year ago ($44mil in FY10 vs. $30mil in FY11). With its FTD business expected to remain at least flat, its Classmates Media business will serve as the key growth driver for the company and for the stock in 2011, in our view."
Gleacher maintains a "Buy" rating on United Online, which closed Friday at $6.20, losing $0.11, or 1.74 percent. Gleacher has a price target of $10 on them.
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