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Why TubeMogul Should Be Valued At Almost Half Of Its Current Worth


Despite having plummeted about 40 percent year-to-date, TubeMogul Inc (NASDAQ: TUBE) is considered by many as a Wall Street darling. However, the fall in the stock price seems justified.

According to an article published by The Street Sweeper on Tuesday morning, the digital video advertising company's valuation "is not supported by key industry factors defined by big-data analysis firm comScore." New data on unique video views and ad videos watched shows that the company is underperforming its wider industry.

"TubeMogul's ad view traffic began its downhill slide in December, falling 9 percent. January ad views year-over-year dropped almost 21 percent and more than 16 percent in February. In contrast, BrightRoll, a Yahoo division, enjoyed 116 percent growth YOY in December, 44 percent in January and 39 percent in February," the article explained.

The message is clear: while BrightRoll and other companies are growing at a fast pace, TubeMogul is shrinking. The latter is losing in ad videos viewed and unique video viewers, two of the most important categories in the business.

"Investors can see that not only have actual numbers dropped each month from December through February, but unique video viewers declined by 10.8 percent in February compared with the previous February," The Street Sweeper added. "Considering that TubeMogul comes in at about 55 to 63 percent of BrightRoll's size, rather than a $400 million valuation, a reasonable valuation would be about $220 million to $252 million."

Shares of TubeMogul recently traded at $13.68, up 1.7 percent.

Posted-In: BrightRoll comScore The Street SweeperNews Short Sellers Rumors Trading Ideas


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