Morgan Stanley Cuts The Rubicon Project, Inc. (RUBI) to Underweight

September 12, 2016 6:52 AM EDT
Get Alerts RUBI Hot Sheet
Price: $8.55 +1.06%

Rating Summary:
    4 Buy, 10 Hold, 1 Sell

Rating Trend: Down Down

Today's Overall Ratings:
    Up: 22 | Down: 33 | New: 34
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Morgan Stanley downgraded The Rubicon Project, Inc. (NYSE: RUBI) from Equalweight to Underweight with a price target of $8.00 (from $11.00), implying downside of 9%. Analyst Brian Nowak is cautious on growth.

"We are incrementally cautious on RUBI’s forward managed revenue growth trajectory into 2017 and beyond given the growing threat of share losses to smaller ad tech players (such as OpenX and Index Exchange) with more competitive offerings and header bidding functionality," said Nowak. "...we believe AMZN is also presenting a growing threat to RUBI’s ability to gain access to inventory and impressions across the web."

The analyst added, "We also continue to see digital ad dollar gains migrate toward GOOGL and FB and away from smaller players like RUBI given the superior scale and ROI (Exhibit 21). Rubicon has experienced a major slowdown in managed revenue in 2016, with growth expected to slow from 26% in 1Q:16 to just 1% in 4Q:16E (see Exhibit 22). Note that our current below-consensus forecast is baking in a recovery (with growth expected to rebound off of easing compares….but if RUBI is unable to improve its competitive positioning even this may be optimistic."

For an analyst ratings summary and ratings history on The Rubicon Project, Inc. click here. For more ratings news on The Rubicon Project, Inc. click here.

Shares of The Rubicon Project, Inc. closed at $8.82 yesterday.

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