Tuesday, December 7, 2010 ReachLocal (NASDAQ:RLOC) Strong Online Local Advertiser
After the attempt by Amazon.com (Nasdaq:AMZN) to acquire Groupon last week, it brought to the forefront the local advertising sector, and among the top candidates in the segment is ReachLocal (NASDAQ:RLOC), according to Needham & Company.
Needham said, "The local online advertising sector has dominated the headlines over the past week, w/ Amazon.com’s $175MM investment in LivingSocial and (unsubstantiated) speculation that GroupOn could be acquired by Google (NASDAQ:GOOG) for more than $5BN. What this news helps to highlight, in our view, is the rapid growth and attractive outlook for the local online ad sector. ReachLocal is one of the only pure-play public investment vehicles in this space, and has benefited from many of these same trends (e.g., revenue is forecasted to grow 43% in 2010)."
Needham reiterates their "Buy" rating on ReachLocal, which closed Monday at $19.48, remaining level from the prior trading session. Needham raised their price target on them from $18 to $22.