Bankrate Flourishing Since IPO

The Bloomberg IPO Index, a measure of the performance of stocks during their first publicly traded year, declined 26% this year, compared with a 5% decline in the Standard & Poor’s 500 Index. According to Renaissance Capital, 41 tech companies went public this year. However, their stocks’ performances have been underwhelming. Tech stocks lost 18% of their value during the year, making them the worst-performing sector in the economy. However, there are still a few new age Internet stocks that have managed to beat market skepticism. One such stock belongs to financial content aggregator Bankrate. Bankrate publishes information on mortgages rates, credit cards, banks, and other financial data relevant for personal finance planning.

Bankrate’s Financials
Bankrate (NYSE:RATE) was founded in 1976 as “Bank Rate Monitor,” a print newsletter for the banking industry that published information similar to what they publish online today. Bankrate went online in 1996 and currently claim to have an online traffic of more than 7 million monthly unique visitors. Bankrate publishes information that they collect through continuous surveys of more than 4,800 financial institutions in all 50 U.S. states. Besides the U.S., the company also has a portal dedicated to Canada and one to China.

Their flagship site, Bankrate.com, aims to provide free rate information to retail consumers on more than 300 financial products such as mortgages, credit cards, automobile and home loans, money market accounts, certificates of deposit, and banking service fees. Besides financial data, the site also works on increasing user engagement by publishing personal finance stories and expert advice.

Bankrate earns revenues through display advertising, performance-based advertising, and lead generation. Last year, they reported revenues of $300.9 million with a net loss of $21.5 million. Bankrate saw revenues in the recently reported third quarter grow 60% to $112.9 million. EPS of $0.07 was also higher than previous year’s loss of $0.09 per share. Excluding items, they earned $0.18 per share. The market was looking for revenues of $99.9 million with adjusted EPS of $0.14.

The company saw growth across all sectors with revenues from hyperlinks growing 63% and lead generation revenues reporting growth of 67% over the year. Print and publishing revenues grew 24% and advertising revenues reported the slowest growth of 3% over the year.

Bankrate listed this year in June at a list price of $15.00 with the intention to raise $300 million. The company recently announced an additional offering of 12.5 million shares at a price of $17.50 per share to raise $218.75 million more in funding.

Bankrate’s Acquisitions
Recently Bankrate announced plans to acquire the insurance lead and marketing assets from InsWeb. Similar to Bankrate’s own operations, InsWeb.com lets users compare insurance quotes and get financial tips on insurance. The $65 million acquisition gives Bankrate ownership of InsuranceRates.com, LocalInsuranceAgents.com, MedHealthInsurance.com, and AgentInsider.com. The acquisition will complement their existing offerings under the Insureme.com portal.

Bankrate’s Expansion Plans
Bankrate plans to continue expanding their position in the market by driving more traffic to their websites through efforts such as search engine optimization, public relations, print partnerships, and increasing the size of their co-brand partner network. Besides driving traffic, they are working on improving traffic monetization by sharpening the focus on enhancing their products and targeting capabilities to advertisers.

Bankrate’s stock is trading at $18.55 with a market capitalization of $1.85 billion. The stock touched a high of $21.94 in November.