DRIV – Digital River Call-Option Being Bid Up

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Feb 08 2007
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Digital River Inc. (Nasdaq: DRIV, stock) is set to announce its’ earning today, Feb-8-2007, after market close. Digital River) provides outsourced e-commerce solutions globally to a variety of companies primarily in the software and high-tech products markets. The Company’s services include online store design, development and hosting, store merchandising and optimization, order management, fraud prevention screening, export controls and management, tax management, digital product delivery via download, physical product fulfillment, multi-lingual customer service, e-mail marketing, Website optimization, Web analytics and reporting.

Rating Indicators for DRIV:
  • Wall Street consensus : 0.46
  • StockScouter rating : 7 / 10
  • Whisper Number for this stock : N/A
  • Schaeffer rating for this stock : 6 / 10
  • Power Rating : 5 / 10
  • Insider Trading (last 52 weeks) : ($1.68M)
  • Zacks Analysts Rating: Moderate Buy
  • Option Trading: Mar 2007 50 Call
  • Implied Volatility (IV) for Mar 2007 $50 Strike : 42.98%

Sales, Income & Growth – For the past 12-months, Digital River registered $286.18 Million sales versus the industry’s $4.04 Billion. Income amounted to $62.18 Million against the industry’s $436.36 Million. While Digital River 12-months sales growth is at 41.40%, the income growth is in the region of 21.40% (the same industry sector sales growth is at 27.40% and income growth of 88.90%).

Profitability & Financial Health – For the past 12-months, net profit margin is in the region of 21.7%. Digital River has a debt/equity ratio of 0.35 compare to industry’s ratio of 0.40.

Stock Resistance & Support Level – The resistance is at 54.84 (50-day moving average) while the first level support is at 49.30 (200-day moving average).

Risks – The price-to-earnings multiple is higher than the average industry level. Also previous day’s closing price for DRIV was slightly below its 50-day moving average.

On end of Jan-2007, Digital River announced that it is providing e-commerce services to support the online sale and download of 2007 Microsoft Office system products and Windows Vista in the United States. Digital River also provides e-commerce services and digital delivery for thousands of other third-party software titles through Microsoft’s Windows Marketplace.

Note that the Call for $55 Strike is being bid-up for both Feb and Mar 2007 with quite a volume.

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