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Analyst praise, 2Q results little help to Alloy Online

Alloy Online shares only picked up 3/32 to 9 1/32 Thursday even though it easily topped analysts' estimates in its second quarter and received positive comments from several brokerage firms.

In the quarter, the provider of content, commerce and entertainment to the Generation Y crowd posted a loss of $5.7 million, or 31 cents a share, on sales of $11.1 million.

First Call Corp. consensus expected it to lose 34 cents a share in the quarter.

On Thursday, WR Hambrecht's Derek Brown reiterated his "strong buy" rating on the stock and a 12-month price target of $30 a share.

"This is the fifth consecutive quarter that Alloy Online has exceeded our published forecasts," Brown wrote in a research note. "We believe the next 3-6 months will prove to be a true "breakout" period for Alloy, marked by robust back-to-school and holiday seasons, as well as the first quarter of profitability (in the fourth quarter)."

Piper Jaffray also reiterated its "strong buy" rating and raised his fiscal 2000 earnings estimate from a loss of 97 cents a share to a loss of 94 cents a share.

Robertson Stephens analyst Lauren Cooks Levitan reiterated her "buy" rating on the stock.

"We expect shares of Alloy to react positively to the company’s strong second quarter results, given we believe they point to impressive back-to-school business momentum and serve to validate our positive investment thesis on Alloy’s multi-channel business model," she wrote in a research report.

Last quarter, Alloy Online topped analysts' estimates, losing $5.5 million, or 36 cents a share, on sales of $7.7 million.

Its shares raced up to a 52-week high of 22 1/8 in November before falling to a low of 5 3/4 earlier this month.

First Call Corp. consensus expects it to lose 96 cents a share in the fiscal year.

All seven analysts tracking the stock rate it either a "buy" or "strong buy."