RetailMeNot (SALE) Sell-Off from SEO Changes Overdone - Wunderlich Securities

Wunderlich Securities analyst Blake Harper reiterated a Buy rating and $48 price target on RetailMeNot Inc. (NASDAQ: SALE) saying the Google SEO changes could hurt but not as much as yesterday's 19% sell-off would suggest.

Harper comments, "We believe the impact of the changes to Google's (GOOGL-NR) search engine results should have less of an impact on RetailMeNot, Inc. (SALE) than the selloff in the shares yesterday would indicate."

He added, "We estimate that ~15% of RetailMeNot's traffic and ~8% of its FY14 revenues could be at risk over the next six months (see sensitivity analysis in Figure 1) although the company has managed through multiple Google search algorithm updates before, still has the deepest content among its peers, and we would expect the company to adjust accordingly to minimize the impact. We are maintaining our estimates and Buy rating; in our base case, we see an impact of $21 million in revenues in FY14 compared to the $323 million in lost market cap today."

For an analyst ratings summary and ratings history on RetailMeNot Inc. click here. For more ratings news on RetailMeNot Inc. click here.

Shares of RetailMeNot Inc. closed at $25.23 yesterday.

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