Couple of firms comment on Gmarket (NASDAQ:GMKT) after the co released its Q3 results and guidance last night:

- RBC Capital notes Q3 was lackluster as GMKT reported revenue of $56.9mm vs. RBC $59.5mm and consensus $60.9mm. EBITDA was $7mm vs. RBC $9.2mm. Pro Forma EPS of $0.13 also lagged RBC $0.15 and consensus $0.16. This was as a result of the holidays as well as unseasonably warm weather, which led to lower traffic, lower take rates (due to warm weather's impact on the higher margin apparel category), and lower advertising revenue.

The key takeaway from Gmarket's 3Q07 report was the October GMV of 322b KRW. With each month in 4Q historically trending better than the previous, it is possible that Gmarket may report GMV of around 966b KRW vs. RBC's current 903b KRW. Things can change between now and the end of the quarter, but the firm isincrementally more comfortable with their estimates. They maintain Outperform rating and $32 target price, which is based on 30x EPS, 15x EBITDA, and a 3.5% FCF yield on 2009 estimates.

- Goldman Sachs notes gross and operating margins fell even further than wthey expected due to the product mix shift from clothing to PCs and electronics. Gmarket paid out a record 51% of transaction revenue in credit card and bank fees, implying that much of the financial returns from its platform accrue to the credit card industry. Management noted that October GMV was a monthly record of W322 bn, and that the rest of 4Q07 should be similar, implying 4Q07 GMV of around W966 bn, up 42% yoy versus 3Q07's up 35% yoy.

GSCO does not believe the Chusok holiday in 3Q07 or stronger GMV growth in 4Q07 fully excuse the 3Q07 earnings disappointment, since Gmarket's GMV growth in future periods should be closer to 35% yoy than 42% yoy, and since Gmarket ought to be growing earnings faster than GMV, not 28pp slower.

They reduce their 2007 EPS estimate by 2% to US$0.70, 2008 by 3% to US$1.03, and 2009 by 3% to US$1.40.

Notablecalls: I'd be a buyer of GMKT around $21 (and change) as I think Q4 will provide some positive surprises to investors. First of all, the results will likely be better than in Q3 as Q4 is seasonally strong quarter. About half of Koeran population is christian = Xmas shopping.

Also, it looks like the co has been hiring quite agressively in Q3. Why? I do have my theories but I'm not running a rumour mill here. But I do think the management may have a card or two up their sleeve here.

I continue to like GMKT here as a L-T story. Sooner or later either eBay or Yahoo! will move in with an offer to buy GMKT. The stock will likely be considerably higher by then.

But as I said, in ultra s-t it's a bounce play.