Citi downgraded TubeMogul Inc (NASDAQ: TUBE) Monday from Buy to Neutral and
raised its price target from $13 to $19.
Analysts led by Mark May noted that TubeMogul reported strong Q3 results, "
as Spend, Revenue, Gross Profit, EBITDA, and margins were all well above our
estimates and guidance. The company also gave 4Q guidance that was above
our estimates, and announced a number of client wins for its Platform Direct
business.”
May concluded that, "while we continue to view TubeMogul as a best-of-breed
digital advertising solution, shares have re-rated meaningfully higher since
the IPO and two subsequent earnings reports, and now more fully reflect our
positive fundamental view and the potential further upside to estimates."
May commented that, "operating leverage also was above our estimates, as
EBITDA was roughly breakeven at $0.5mn. However, we expect management will
look to reinvest IPO proceeds more heavily in 4Q and beyond, and thus do not
expect this degree of operating leverage to persist in the near term."
The analyst report concluded that with increased CY15 forecasts :and we now
look for spend, revenue, gross profit, and EBITDA of $380mn, $154mn, $114mn
in gross profit, and $(2)mn."
TubeMogul recently traded at $15.78, down 6.9 percent.
