Albert Fried: Reiterating Overweight On Tube Mogul, $21 Target

In a report published Wednesday, analysts at Albert Fried & Company reiterated their Overweight rating on

. The price target was maintained at $21. During 1Q15, the largest players in the New High Experience media segment either initiated or expanded their programmatic advertising. The analysts believe that "programmatic headwinds" are likely to benefit TubeMogul. The analysts also expect Fx to "be a revenue head wind for TUBE but recent trends in commodities and currency rates suggest that the best days of dollar strength may be over." The company was able to make progress during 1Q15 in launching programmatic advertising for television in Australia. TubeMogul has also entered into meaningful relationships with Heineken and Quiznos. "While we are very bullish on TUBE's long term prospects we expect revenue lumpiness from quarter to quarter as Advertisers are still in the process of experimenting and validating technologies and systems," the analysts said. Albert Fried & Company believes, however, that programmatic advertising has huge growth potential and is currently similar to internet search when it was still in its nascent stage. The analysts expect programmatic advertising to grow in the mid-to-high double digit range going forward, with TubeMogul being a thought leader in the segment. Although the analysts expect the company to report revenue of $29.4 million for 1Q15, higher than the 1Q14 level, they also expect the company to see growth in operating expenses that is higher than revenue growth in the long term, as the company aggressively ramps operations to win market share and lower costs in the short term.