Trefis's graphical modelling tools require Flash, but here's a preview of some of the content you'll see once
Flash is enabled:
Below are key drivers of Monster's value that present opportunities for upside or downside to the current Trefis price estimate for Monster:
- Monster International Job Postings EBITDA Margin: Monster's International Job Postings EBITDA Margins declined from around 14% in 2008 to 11% in 2012. Monster is facing strong competition from social media platforms which are becoming alternative locations for job postings. We expect the company to increase its sales and marketing expenses to promote its new technologies like Semantic Search 6sense and SeeMore. The increased operating expenses are expected to drive a decline in EBITDA margins. The search technology is designed to be smarter than traditional keyword search by incorporating more weighting factors for searches. The lack of such advanced technology on social platform could help the company maintain a competitive advantage. There could be an upside of 15% to ${trefisprice} if EBITDA Margins improve to around 8% by the end of Trefis forecast period. However, if this search technology does not gain traction and the company increases its expenses resulting in the margins declining to 5%, there could be a downside of 15% to ${trefisprice}
${header:summary}
Monster operates Monster.com, an online job search portal that connects employers with job seekers. Monster has local presence in all the primary job markets of North America and Internationally (primarily Europe and Asia). In each geography, the company makes money from two sources:
- Employers - Employers range from large enterprises to Small and Medium Businesses (SMBs). Employers pay Monster to list available job openings on the Monster.com website and also to get the rights to view resumes of candidates / job seekers. Revenue from employers is the main source of revenue from in each geography.
- Job Seekers - While Monster does not charge job seekers to search through job openings or listings, it does charge job seekers for premium services such as resume writing, covering letter writing and priority resume listing.
${header:sourcesofvalue}
Monster's North America Career Services business is the primary source of value for the following reason:
North America job listings expected to improve while International listings decline
International job listings which comprised primarily of job listing from Europe and Asia declined 30% in 2012 to 0.7 million. In comparison, North American job listings declined 5% from 1.2 million to 1.1 million between 2011 and 2012. The macroeconomic situation in North America is expected to start improving in the near term which will drive an increase in job listing. Internationally, the economic situation is expected to keep declining in the near term. We expect International listings will increase to 0.7 million and North American listings will increase to 1.2 million by the end of the Trefis forecast period. Internationally, we expect growing online penetration of job recruitment in both Europe and Asia to drive listings.
${header:trends}
Improving resume search technology
Monster is ramping up its efforts to improve resume search by incorporating intelligent search technology, Semantic 6Sense, into its next generation of products for both employers and job seekers.
6Sense is a new resume search technology designed by Trovix, a company that Monster acquired in 2008. The search technology is designed to be smarter than traditional keyword search by incorporating more weighting factors for searches.
Traditional keyword search for resumes is inefficient due to the high number of candidates that may have broadly relevant experiences. Such search results in a long list of candidates to choose from for recruiters, making it more time-consuming to find the right candidate.
6Sense, however, is more precise because it gives extra points to candidates with specific and rare expertise, work experience, and desirable skills. The search results highlight these “best” candidates at the top of the search results page. This improved search mechanism is designed to save time for recruiters.
Social networks (Facebook, Twitter, LinkedIn) and free alternative job sites (Craigslist) are hurting Monster
Monster is facing tough competition from social media / networking sites such as Facebook, Twitter and LinkedIn. Many LinkedIn members are employed and are known as "passive candidates", the kind of candidates recruiters covet since conventional wisdom is that the best people already have jobs. Monster does not have a similar network as Monster.com attracts a candidate only when they are either out of a job or are considering entering the job search process.
Trefis Forecast Rationale for Average Price per Resume Access
${header:what}
${forecast} refers to the average priced paid by employers/companies for viewing resumes of candidates on Monster.com
${header:historicals}
We estimate that ${forecast} declined from $500 per 1,000 page views in 2008 to $450 per 1,000 page views in 2011. In 2012, we expect the ${forecast} to have grown 10% as the company launched its cloud based services outside U.S.A. Going forward, we expect ${forecast} to decline at a steady rate driven by the declining popularity of what are now considered "expensive" sites (like Monster.com).
${header:rationale}
Trefis considered the following factor for its forecast:
Monster.com is facing stiff competition from various other offerings and employers are increasingly moving to or trying new, more cost-efficient and quicker alternatives of recruiting such as using social networking sites like Facebook and Twitter.
We summarize various competitive pressures as follows:
- Competition from social networking sites - Facebook and Twitter
- Competition from LinkedIn which has 42 million members. Many of LinkedIn's members are employed and are known as "passive candidates"--the kind of candidates recruiters covet since conventional wisdom is that the best people already have jobs
- Competition from niche sites such as TheLadders, Dice and BlueSteps, which focus on specific sectors (like Technology, Healthcare etc.)
- Competition from job search engines such as SimplyHired and Indeed, which trawl the job boards and corporate employment sites to grab every available posting
- Competition from Craigslist, especially for low-paying jobs (Craigslist has free postings for most areas)
- Competition from employment sections of corporate websites which have also become more sophisticated.
Back to Company OverviewHow Does Trefis Modelling Work?
How do we get the historical numbers for this chart?
Trefis has a team of in-house Analysts who gather historical data from company filings and other verifiable sources. When historicals are available, we explain how we got them at the bottom of the Trefis analysis section below.
Who came up with the Trefis forecast for future years?
The Trefis team of in-house Analysts considers a variety of factors when projecting any forecast. The rationale for our projections is explained in the Trefis analysis section below.
How does my dragging the trendline on the chart impact the stock price?
- We use forecasts for business drivers to calculate forecasted Revenues and Profits for each division of the company.
- We then use forecasted Profits in a Discounted Cash Flow (DCF) model to obtain the Price Estimate for the company.
See more on: DCF MethodologyView All Help Topics