GSI Commerce (NASDAQ:GSIC) hit a 4 year low yesterday, closing below $10 for the first time since October 18, 2004. My go to analysts at Deutsche Bank are still cautiously optimistic on GSI saying in yesterday’s brief:
Net/Net, while we don’t think GSI is sheltered from a slowdown in consumer spending, the company is well positioned to succeed even in this environment, for two reasons.
First, there is a shift towards results-oriented business, in our view, especially when times are tough. In this case, GSI’s services-based model, where it partakes on a commission basis, certainly will ease a multi-channel retailer’s concerns of high fixed costs. In fact, the company’s two extended long term contracts, including a 15-year extension with Dick’s Sporting Goods and a 10 year extension with Aeropostale, validate the value GSI’s service oriented model.
Secondly, the company’s interactive marketing services are helping multi-channel retailers enhance their brand online and grow its fastest-growing sales channel, even as its offline business falters. In addition, the recently acquired e-mail business (e-Dialog) provides a natural extension for retailers to leverage in-house customer e-mails, effectively monetize existing assets without significant cost.
