Why The Rubicon Project, Inc. Shares Will Keep Rallying
While Fools should generally take the opinion of Wall Street with a grain of salt, it's not a bad idea to take a closer look at particularly stock-shaking analyst upgrades and downgrades -- just in case their reasoning behind the call makes sense.
What: Shares of The Rubicon Project, Inc. soared 15% today after the advertising automation technologist posted strong Q1 results and received a sector perform to outperform upgrade from RBC Capital.
So what: Along with the upgrade, analyst Rohit Kulkarni planted a price target of $19 on the stock, representing about 65% worth of upside to yesterday's close. So while momentum traders might be turned off by Rubicon's sharp pullback in recent weeks, Kulkarni's call could reflect a sense on Wall Street that its growth prospects are becoming too cheap to pass up.
Now what: According to RBC, Rubicon's risk/reward trade-off is rather attractive at this point. "RUBI posted a strong 'no-surprises' Q1 result, its first earnings out of the gate," noted Kulkarni. "With a 45% correction in RUBI shares since April, and fundamental trends coming in better than expected, we are upgrading the shares of RUBI to Outperform with a $19 PT, as we continue to consider RUBI a best-in-class ad-tech asset." When you couple Rubicon's still-speculative growth trajectory with today's big run-up, however, I'd hold out for a much wider margin of safety before buying into that optimism.
More compelling ways to grow
If you thought the iPod, the iPhone, and the iPad were amazing, just wait until you see this. One hundred of Apple's top engineers are busy building one in a secret lab. And an ABI Research report predicts 485 million of them could be sold over the next decade. But you can invest in it right now... for just a fraction of the price of AAPL stock. Click here to get the full story in this eye-opening new report.
The article Why The Rubicon Project, Inc. Shares Will Keep Rallying originally appeared on Fool.com.Brian Pacampara has no position in any stocks mentioned, and neither does The Motley Fool. 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 - 2014 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.