3 Advertising Tech Stocks to Load Up On - The M Fool
Independent mobile ad network
Millennial Media has been public the longest at just over a year and the weak returns on this stock has been a primary reason for the negativity on the two that followed in this sector recently. This stock peaked around $28 on the first trading day and didn’t see a bottom until around $6 in April. For the first 12 months, the stock lost nearly 80% of the value from those initial trades.
Similar to Tremor, the company continues to forecast growth in excess of 50%, but it hasn’t stopped the stocks from collapsing. A big issue with specifically Millennial has been some of the concerns around monetizing mobile, though as those have faded it hasn’t helped the stock.
At a market cap of only $750 million, analysts forecast the stock as trading at less than 2 times 2014 revenues that will grow around 46%. The disconnect between the current valuation and the growth rate is one of the largest in the market. Typically a stock with those growth rates and the projection of being profitable would send the stock soaring towards multiples of at least 4 or 5 times projected revenues.
Appears that the market wants MM to prove it can be profitable as well as compete with the big dogs. As it stands we are headed towards profitability this year and so far we seem to be holding our own against the top guys.