What Will Local.com Earnings Show? (LOCM)

Local.com Corp. (NASDAQ:LOCM) will post earnings after today’s close.  The company has very thin earnings coverage, but consensus estimates from First Call were -$0.35 EPS and $5.07 million on last look.  As with all microcaps like this, those estimates should be used as more of a ‘guestimate’ rather than set in stone.

The company has seen shares rocket up this year, but now they are back closer to levels before all the recent news came out.  Shares are down about 1% at $5.60 this morning, and the stock has a $3.05 to $13.74 trading range over the last year.  Unfortunately that $13.00 price was only briefly reached for two days in early July on new patent awards and the stock wasn’t able to hold anywhere close to it.

The stock has no options, and the actual analyst coverage is very very thin. The company posted $4.88 million in revenues last quarter and almost $3.63 million the quarter before. The July short interest was also listed as 1.79 million shares. That would be more than 20% of the float, but that was before a private placement at $5.50 per share for two institutions that raised $13 million for the company.  That $13 million was earmarked for acquisitions, sales channel development, IP, and general use.

With a lack of coverage and with a new cult stock following, the chat rooms and message boards will likely have more opinions and interpretations than anywhere else tomorrow (you are on your own there).  Either way, this one should be active in after-hours and tomorrow.  This is actually one of the few remaining microcap Internet stocks that we feel could easily be integrated into a much larger company, although the price and desire by management are more than just a mere consideration here. 

Jon C. Ogg
August 6, 2007

Jon Ogg can be reached at [email protected]; he does not own securities in the companies he covers.