Daily Management Review

Monster on a Turn-Around Path in the Near Future


08/17/2015




Monster on a Turn-Around Path in the Near Future
With increase in demand in North America and the APAC region Monster Worldwide's business is forecast to turnaround in the coming quarters.
 
The revenues of the company are expected to increase from the third quarter of 2015.
 
There would however be macro-economic and competitive challenges in the near-term in the European markets. the new products and strategies by Monster are gaining ground and have accelerated its engagement among both members and employers as is evident from the company’s recent results.
 
The recent cost cutting measures that have been initiated by the company are also expected to increase the profitability of the company in addition to improving the top-line growth. The price estimate for the stocks of the company has therefore been readjusted to $7.40.
 
With the expected growth of the product Careers-North America, the company’s management expects top-line growth to pick up in the North American region during the coming quarters with a growth in revenue of around 2% to 4% sequentially during the third quarter of the current fiscal year. there is also a strong possibility, according to company sources, that the revenue could rise in year-over-year terms in the fourth quarter of 2015.
 
The fact that Monster’s traditional and new products are gaining traction among customers within the North American region is evident from the recent bookings growth of 7% within the region during Q2 2015. This also good news for the company in terms of future growth in other international geographies as the company first rolls out new products in North America and then subsequently launches the products  in other parts of the world.

The fate of new products can be judged by the reception that they get from the North American region. Therefore given the present trends for its products in the North American regions, the company can safely predict the future demand in the international regions.
 
The result of the company in the near future is further expected to be fueled by the robust demand in the APAC region. There was a 11% sequential and 13% year-to-year growth in constant currency terms during Q2 2015 in the region. However due to seasonality issues in the Korean market, the APAC revenue could see short-term pressure during Q3 of 2015.
 
Various macroeconomic and competitive challenges have however beset the European market. There was a drop of 5% sequentially and 1% annually in revenues during Q2 of 2015 in terms of constant currency from the European market and the same trend is expected to persist in the near-term until the fourth quarter of the current fiscal year.  
 
The cost cutting measures of the company that include the retrenchment of the workforce by around 300 positions is underway and which are yielding results. There has been a rise in the EBITDA margin of Monster by 150 basis points to sequentially reach 16.1%. The target for the company is to reach an EBITDA margin of 18-22% by Q4 2015.
 
The “all the jobs, all the people” strategy of the company is seemingly gaining traction in the market as monthly job postings crossed 4 million mark recently as compared to 250,000 jobs in early 2014. Memberships of the premier global job site increased by 20% due to the above factor during Q2 2015.

 (Source:www.forbes.com) 
 






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