Buy TubeMogul (TUBE) on Correction, RBC Capital Says

RBC Capital analyst Rohit Kulkarni lowered his price target on TubeMogul, Inc (NASDAQ: TUBE) to $20.00 (from $21.00) following results but maintained an Outperform rating, saying the are buyers on the 30% after-hours sell-off.

Kulkarni commented, "TUBE reported Q4 results clearly above its guidance range, but 2015 guidance is a tad below Street’s expectations. Video Advertising is the fastest growing segment in online advertising, and TUBE is a leading pure-play ad-tech player with an “enterprise software”- style value proposition focusing on brand advertisers."

The keys for the quarter: Pos: 1) Platform Direct Spend – grew 102% Y/Y as spend / client increased 37% & client count +60% Y/Y; 2) Cohort Disclosure – provides sig transparency & conviction of the recurring / sticky nature of TUBE’s offering; Neg: 1) Ongoing Shift to Large Clients - TUBE added 25 Platform direct clients, inline with Q3 net adds but below the 37-43 in prior 3 qtrs (key leading indicator but larger clients are better quality); 2) Economic Take Rate – (Gross Profit as a % of Ad Spend) came in at 31.1%, declined Y/Y but increased Q/Q.

'15 Rev & Gross Profit go to $150/$107MM from $166MM/$114MM, in line with guidance.

"We are Buyers of this 28% correction. Yes, the headline guide is below expectations. Hence, we attribute this reaction to an “expectations miss,” rather than “fundamentals.” Our TUBE Long Thesis remains..."

For an analyst ratings summary and ratings history on TubeMogul, Inc click here. For more ratings news on TubeMogul, Inc click here.

Shares of TubeMogul, Inc closed at $17.94 yesterday.

You May Also Be Interested In

• Citi Upgrades United Microelectronics Corp (2303:TT) (UMC) to Buy 'with limited downside'
• Boston Scientific (BSX) PT Raised to $83 at Stifel
• SL Green Realty (SLG) PT Lowered to $45 at Jefferies