Divx (DIVX) has a good quarter. Revenue was $16.7 million, up 58% from last year. But, forecasts for Q1 07 were for revenue to be as low as $17.3 million. This is at a company where revenue more than doubled from 2004 to 2005, and doubled again for the first six months of 2006 compared to the same period in 2005. (DIVX S-1)
Wall St. has to wonder what happened to the video revolution? Did the YouTube, Joost, Movielink, video iPod world leave Divx behind?
Apparently so. The stock is trading off about 5% at 10.05 AM to $22.50. The shares have a high/low since the IPO of $31.89/$18.00. Even with the shares down, the company has a huge market cap of almost $750 million. So, if the company does $80 million in revenue this year, it trades at 9.4x sales.
Pretty high for a company that may not be growing much quarter-over-previous-quarter.
Douglas A. McIntyre can be reached at [email protected]. He does not own securities in companies that he writes about.