BMO Capital Downgrades TubeMogul, Inc (TUBE) to Market Perform

BMO Capital downgraded TubeMogul, Inc (NASDAQ: TUBE) from Outperform to Market Perform with a price target of $15.00 (from $22.00), saying while the quarter looks good, competitive dynamics are shifting.

Analyst Daniel Salmon commented, "We expect a strong quarter tonight with a good likelihood of beating our and consensus estimates. Though TubeMogul has not had the same level of publicly announced new client wins as it saw at the end of 2014, we believe current momentum remains strong. But, we’re more cautious due to changes in the competitive environment. The news that is likely to be the focus of investor queries this evening is Google’s decision to remove YouTube inventory from the DoubleClick Ad Exchange (announced last Thursday). Only 5% of TubeMogul’s media buys are sourced from YouTube, so we do not see this as overly negative for estimates, as TubeMogul can divert that spending to other publishers. The bigger competitive issue we’re focused on is privately held Appnexus’s entrance into the video buying marketplace. Likely the largest independent ad tech platform in terms of total dollar flow through the platform, Appnexus announced the launch of its new video offering in June and we’ve received positive feedback on it in recent conversations with industry contacts. In addition, Appnexus is well-known for operating at a low take-rate and is the only player in the broader ecosystem that has openly discussed single-digit rates to our knowledge. As importantly, Appnexus’s deep embedding at the agency holding companies (particularly WPP, which owns 15% of Appnexus) gives it the opportunity to quickly “turn on” video revenues through this installed base. We fully expect TubeMogul to continue innovating and succeeding, but at the margin, this leads us to a more cautious view."

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 $13.34 yesterday.

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