Monster: Higher Expenses + Weak Domestic Revenues = Uncertainty

3/19 - "While we had anticipated a skew in the quarterly pattern of marketing costs in 2008, the magnitude of the 1Q expenditures appears to be at least 30% higher than we had modeled...Somewhat troubling to us is that while traffic has improved ytd through February (unique visitors to Monster.com up 12.2% yoy), the increase does not seem proportional to an estimated 70% increase in marketing/promotion spending."

"We are cutting our 2008/2009/2010 estimates to $1.34/$1.85/$2.38 from $1.64/$2.04/$2.52 to reflect both more conservative domestic revenue expectations and higher cost assumptions...Based on our lower estimates, our 12-month DCF- and PEG-based price target moves to $27 from $32. We see value-support for the shares in the high-teens/low-20s range based on an S&P 500 P/E on 2008/2009 EPS (13.1X x $1.34 = $18; 11.9X x $1.85 = $22)."