HSN used to have a market darling status. As with all stocks driven up on the expectation of high growth, it was punished when its expected growth was reduced to a still excellent 32%, driven by acquisitions. Normally this type of price drop would see the share price turnaround into reporting season. Which it started to do. However the projection of a flat year in FY19 took the wind out of the recovery. I think there is very good reason for this. Firstly, being priced as a growth company means the market expects growth. This is even more important for a company that has been buying up other companies. Previously HSN had done this very well.

The problem, the way I see it, is linked to two factors. One of the reasons for the revised profit in July was a delay in receiving a payment in FY18, meaning it moved to FY19. That's fair enough. However, this payment is now due to fall in FY19. The company is forecasting a flat year with this payment included. I couldn't easily find the size of this payment but if it was enough to help dent FY18, you'd expect it to boost FY19 when they eventually receive it. No growth forecast therefore means, excluding this payment, they are expecting a contraction in revenue.

Things may recover at some point but that would not be known for a year. However a decline in revenue this year - when the payment is excluded - means that the current share price is too high.