Why Tremor Video, Inc. Shares Tumbled

Don't let it get away!

Keep track of the stocks that matter to you.

Help yourself with the Fool's FREE and easy new watchlist service today.

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 Tremor Video  (NYSE: TRMR  ) plunged a harrowing 49% Friday after the online video advertising specialist reported disappointing third-quarter results.

So what: Quarterly revenue rose 17% year over year to $35.3 million, which translated to a net loss of $0.05 per share. Analysts were looking for a much smaller net loss of just $0.02 per share on sales of $36.26 million.

Worse yet, Tremor Video also issued weak fourth-quarter revenue guidance in the range of $29.5 million and $30.5 million, also significantly below analysts' projections for Q4 sales of $38.56 million.

Now what: Perhaps unsurprisingly, Tremor Video's poor performance and forward outlook sparked no less than three downgrades on the day, driving shares as much as 54% lower at one point. Call me crazy, but that does seem a bit of an overreaction for a company whose cash now represents more than 40% of its entire market capitalization. 

To be sure, Tremor will need to prove it can eventually achieve sustained profitability over the long term. While I wouldn't personally buy shares until that happens, its current results are hardly indicative of a failing company as it stands today. Don't be surprised, then, if the stock sees a near-term bounce once the market realizes its punishment doesn't fit the crime.

Got iPad?
Apple's newest iPad Mini with Retina display 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 with Retina display. 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

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

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.

Be the first one to comment on this article.

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: 2719855, ~/Articles/ArticleHandler.aspx, 10/1/2016 5:10:02 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 19 hours ago Sponsored by:
DOW 18,308.15 164.70 0.91%
S&P 500 2,168.27 17.14 0.80%
NASD 5,312.00 42.85 0.81%

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

9/30/2016 3:57 PM
TRMR $1.71 Up +0.08 +4.91%
Tremor Video CAPS Rating: *