Why YuMe, Inc. Shares Skyrocketed

Before you go, we thought you'd like these...
Before you go close icon

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of digital video advertising specialist YuMe, Inc.  soared 32% today after its quarterly results and outlook topped Wall Street expectations.

So what: The stock has slumped since its IPO in early August, but YuMe's first report as a public company -- a third-quarter loss of just $0.03 per share on a revenue surge of 39% -- reignited optimism over its growth prospects going forward. In fact, the company's advertising customer count increased 45% from the year-ago period to 336, giving analysts some decent visibility into upcoming quarters.

Now what: Management now expects full-year adjusted EBITDA of $5 million-$8 million on revenue of $154.5 million-$157.5 million. "We announced new versions of our Audience-Aware SDK and Audience Insights for publishers as well as a new version of our Audience Amplifier for brand targeting today," said CEO Jayant Kadambi in a press release. "These enhanced versions of both the supply and demand-side of our platform allow TV brand advertisers to get reach and multi-screen frequency with a new measure of audience attentiveness so critical given today's fragmentation of consumer attention." When you couple today's big share-price bump with YuMe's still relatively unproven business model, however, I'd wait for a wider margin of safety before making a long-term bet on that tech talk.

Got iPad?
The new iPad Mini Retina might be hard to come by this quarter, given all the reports of supply constraints. Well, we're going to be sure to get a few -- and give them away! That's right: For the first time ever, The Motley Fool is hosting a contest where you can win a free iPad Mini Retina. All you have to do is tell us why you love The Motley Fool by clicking here! We'll pick the three most Foolish submissions to receive a free iPad Mini with Retina display.

See full terms and conditions by clicking here

The article Why YuMe, Inc. Shares Skyrocketed originally appeared on Fool.com.

Fool contributor Brian Pacampara has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Copyright © 1995 - 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

Read Full Story

Sign up for Finance Report by AOL and get everything from business news to personal finance tips delivered directly to your inbox daily!

Subscribe to our other newsletters

Emails may offer personalized content or ads. Learn more. You may unsubscribe any time.

People are Reading