Stock of the day 02/03/2015 – Moneysupermarket.com Group PLC

Its purpose might be to save you those precious pounds, but Moneysupermarket.com Group will be hoping to announce big 2014 gains when it reveals its full year 2014 earnings release on Tuesday.

For much of 2014 moneysupermarket.com was incredibly flat; after opening at £1.81 following a mixed 2013, the company struggled to break out of its £1.60 and £1.90 limits. By mid-April it had hit a low of £1.59, and continued to putter along as it went from spring to summer and summer to autumn bouncing between this 30p boundary. However, its interim management statement in mid-November sparked the stock into life, and from £1.89 at the end of October, it reached its 2014 high at the very end of the year by hitting £2.36. It opened 2015 marginally down at £2.33, but after a brief wobble in the first half of January resumed its climb. This culminated in an all-time record close of £2.71 at the end of last week, overcoming some ominous news at the start of February.



The key worry for the company is the expansion of Google’s own price comparison platform. Despite Google failing to see the world on fire with its service, the search-engine giant remains committed to this sector and given that 40% of moneysupermarket.com’s traffic comes from Google referrals, the growth of Google’s version of this service could have a nasty sting in its tail for the company. It was this observation that caused Numis to downgrade the stock to a ‘sell’ rating, causing the slip at the start of last month.

However, overall analysts are positive ahead of Tuesday’s full year results. It has an average rating of ‘buy’ and a 12 month target price of £2.35; if you look at the past two interim statements the figures can explain why. The impetus for its late-2014 rally came from the results it announced in mid-November, one that saw an 18% growth in total revenue across the group for July to September. Flash-forward to January and an energy switch slowdown in the fourth quarter led revenue growth to fall to 4% for the fourth quarter. However this doesn’t tell the whole story; forecasts originally predicted -4%, with this 8% increase on expectations meaning the stock didn’t stay down for long.

According to moneysupermarket.com’s own estimates, full year growth should be on track for a 10% increase in total revenue to £248 million; yet following the Google-inspired drop of early February, investors may be looking for reassurances about the future on top of these potentially strong figures.