Jupitermedia Mystery 10% Stock Rise Ahead of Earnings (JUPM, GYI)

Jupitermedia (NASDAQ:JUPM) reports earnings after the close.  The stock is actually up 11% today and it hasn’t yet reported.  First Call estimates are $0.04 EPS on revenues of just over $36.2 million, and next quarter is also $0.04 EPS on $35.8 million revenues.

Analysts have been somewhat cautious in general and the average target looks very close to the adjusted current price after today’s gains.  The chart has also been closer to the lower-end of a longer-term trading band, but the pre-earnings gain puts this one in a neutral stance with no clearread either way.  Options are hard to read with today’s gain, but it looks like options traders would be expecting a move of up to $0.45 to $0.50 in either direction.  Sorry the actual internals are hard to read today, but that is what the tea leaves are indicating.  Lastly, NASDAQ has its short interest as 2.318 million shares for July, more than 6-days average volume.

This one will be interesting to report because of some overlaps with recent earnings and recent industry changes.  The Jupierimages unit was the likely reason for the buyout offer from Getty Images (NYSE:GYI).  If you subscribe to our special situation newsletter or if you read some exit updates this week regarding what we thought was going to happen to Getty Images and legacy stock photo businesses, then the run in Jupitermedia today will even be more of a headscratcher.  The good news for Jupiter is that it has other operations and has been trying to keep itself diversified in new media areas (see its last acquisition of MediaBistro.com) that will keep that major stock photo business from being such a key factor in the years ahead.

The balance sheet on this one is not one we normally we would want to give a solid evaluation to because of the large goodwill and intangibles, even if it does own the beloved Internet.com domain.  This 10% rise ahead of the numbers is more than puzzling.

Jon C. Ogg
August 8, 2007

Jon Ogg can be reached at [email protected]; he does not own securities in the companies he covers.