Shares of Outerwall Inc (NASDAQ:OUTR) are down significantly in morning trading today after the company reported a drastic decline in their RedBox movie rentals from a year ago. Although the company beat analyst expections by a wide margin on an EPS front, reporting $1.43 per share versus $0.68, on revenue for the quarter of $527.2 million, it was the company’s outlook and declining RedBox rentals which sent shares tumbling this morning.
Outerwall Inc (NASDAQ:OUTR) now forecasts $5 to $6.30 per share profits for 2016, while analysts were expected an EPS for the year of $5.91. At the same time, Redbox rentals have dropped a staggering 24.3% in the fourth quarter when compared to Q4 of 2014. The decline could be because of the increasing number of streaming video services such as Netflix, Hulu, and others. Quite simply, people do not seem all that interested in renting physical movies which need to be returned.
The stock has fallen 20.34% or $6.65 following this negative news, hitting $26.04 per share. About 1.08M shares traded hands or 87.27% up from the average. OUTR has declined 57.48% since July 1, 2015 and is downtrending. It has underperformed the S&P500 by 48.62%.
From a total of 6 analysts covering Outerwall (NASDAQ:OUTR) stock, 5 rate it a “Buy”, 1 a “Sell”, and 0 a “Hold”. This means that 83% of the ratings are positive. The highest target price is $85 while the lowest target price is $48. The mean of all analyst targets is $67.93 which is 160.87% above today’s ($26.04) stock price. Outerwall was the topic of 9 analyst reports since August 12, 2015 according to the firm StockzIntelligence Inc. B. Riley & Co upgraded shares on December 8 to a “Buy” rating. Zacks upgraded shares to a”Hold” rating and a $72 target share price in their report from an August 12. Roth Capital maintained OUTR stock in a recent report from December 8 with a “Buy” rating. Finally, Northland Capital maintained the stock with a “Outperform” rating in a report they issued on a September 29.
The institutional sentiment increased to 0.92 in Q2 2015. It’s up 0.03, from 0.89 in 2015Q2. The ratio improved, as 58 funds sold all their Outerwall Inc shares they owned while 71 reduced their positions. 18 funds bought stakes while 101 increased their total positions. Institutions now own 19.84 million shares which is 8.96% less than the previous share count of 21.80 million in 2015Q2.
Stonerise Capital Management Llc holds 10.45% of its total portfolio in Outerwall Inc, equating to 415,000 shares. Arlington Value Capital Llc owns 1.15 million shares representing 8.77% of their total US portfolio. Moreover, Fine Capital Partners L.P. has 6.15% of their total portfolio invested in the company, equating to 1.10 million shares. The California-based Park West Asset Management Llc has a total of 4.96% of their portfolio invested in the stock. Kestrel Investment Management Corp, a California-based fund reported 155,950 shares owned.
Outerwall Inc. is a provider of automated retail solutions. The company has a market cap of $571.06 million. The Company’s business divisions include The Redbox, Coinstar and New Ventures. It has 6.23 P/E ratio. The Redbox segment is focused on the entertainment consumer sector, where clients can rent or purchase movies and video games from self-service kiosks.