RECOMMENDATION 6-14-09
We rate INNERWORKINGS INC (INWK) a SELL. This is driven by a number of negative factors, which we
believe should have a greater impact than any strengths, and could make it more difficult for investors to
achieve positive results compared to most of the stocks we cover. The company's weaknesses can be seen
in multiple areas, such as its feeble growth in its earnings per share, deteriorating net income, poor profit
margins, generally disappointing historical performance in the stock itself and disappointing return on equity.
HIGHLIGHTS
INNERWORKINGS INC has exprienced a steep decline in earnings per share in the most recent quarter in
comparison to its performance from the same quarter a year ago. Earnings per share have declined over the
last year. We anticipate that this should continue in the coming year. During the past fiscal year,
INNERWORKINGS INC reported lower earnings of $0.33 versus $0.45 in the prior year. For the next year, the
market is expecting a contraction of 3.0% in earnings ($0.32 versus $0.33).
The company, on the basis of change in net income from the same quarter one year ago, has significantly
underperformed compared to the Commercial Services & Supplies industry average, but is greater than that
of the S&P 500. The net income has significantly decreased by 93.6% when compared to the same quarter
one year ago, falling from $3.86 million to $0.25 million.
The gross profit margin for INNERWORKINGS INC is rather low; currently it is at 24.40%. It has decreased
from the same quarter the previous year. Along with this, the net profit margin of 0.30% trails that of the
industry average.
Current return on equity is lower than its ROE from the same quarter one year prior. This is a clear sign of
weakness within the company. Compared to other companies in the Commercial Services & Supplies industry
and the overall market on the basis of return on equity, INNERWORKINGS INC has underperformed in
comparison with the industry average, but has exceeded that of the S&P 500.

Good Investing, Ken