Can Millennial Media Keep It Up?

Millennial Media (UNKNOWN: MM.DL  ) was one of last week's biggest gainers, moving 11% higher after a few positive developments.

On Tuesday, the online marketer announced the availability of the Millennial Media Exchange -- or MMX -- a platform that the company claims will deliver superior results, greater control, and improved monetization opportunities. 

On Friday, Millennial Media received antitrust clearance for its pending acquisition of Jumptap, an programmatic audience platform that reaches 439 million mobile users worldwide.

We also can't ignore Rocket Fuel's IPO taking off on Friday. The provider of digital advertising solutions soared 93% on its first day of trading, likely drawing attention to other digital marketers that haven't been as successful.

Millennial Media went public last year at $13. It moved higher initially, but now it's joined the ranks of busted IPOs. It's still waffling about in the single digits even after last week's pop.

Millennial Media's appeal is simple enough to grasp. It provides developers of mobile apps a way to monetize their offerings across all of the major mobile operating systems. There's certainly growth to be had as the leading mobile advertising that's operating-system agnostic. Revenue climbed 45% in its latest quarter. Margins improved, but profitability remains inconsistent.

Rocket Fuel's success last week may help reverse the sentiment that has kept many of the recent online advertising debutantes in check.

YuMe has finally cracked above its $9 price from last month's IPO, but that also took the work of all of its underwriters initiating coverage with bullish ratings earlier this month when the stock was trading below its initial price.

There's no denying that Internet advertising will continue to be a hot market. The challenge for Millennial Media is proving to investors that it will be worth today's price of admission. 

Healthy organic gains, new initiatives including the MMX advertising platform, and acquisitions will continue to point Millennial Media in the right direction. Analysts see revenue growth accelerating to soar 60% next year. They also see profitability popping fivefold to hit $0.26 a share. The growth is impressive, but the forward earnings multiple is stubbornly steep. 

However, as the smartphone market continues to grow, it's hard to resist Millennial Media's appeal as one of the leading resources for developers to get paid on their apps. It may take some time for the fast-growing company to catch up last year's IPO price of $13, but it is taking the right steps to get there eventually.

Here's a smartphone play that isn't as risky as Millennial Media
Want to get in on the smartphone phenomenon? Truth be told, one company sits at the crossroads of smartphone technology as we know it. It's not your typical household name, either. In fact, you've probably never even heard of it! But it stands to reap massive profits NO MATTER WHO ultimately wins the smartphone war. To find out what it is, click here to access The Motley Fool's latest free report: "One Stock You Must Buy Before the iPhone-Android War Escalates Any Further..."

Read/Post Comments (1) | Recommend This Article (0)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Add your comment.

Compare Brokers

Fool Disclosure

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2649438, ~/Articles/ArticleHandler.aspx, 9/27/2016 1:33:34 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Today's Market

updated Moments ago Sponsored by:
DOW 18,220.08 125.25 0.69%
S&P 500 2,159.05 12.95 0.60%
NASD 5,296.23 38.74 0.74%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

12/31/1969 7:00 PM
MM.DL $0.00 Down +0.00 +0.00%
Millennial Media CAPS Rating: *
FUEL $2.71 Down -0.01 -0.37%
Rocket Fuel Inc. CAPS Rating: **
YUME $4.02 Down -0.10 -2.43%
YuMe CAPS Rating: ***