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.

Shares of video advertising specialist TubeMogul (NASDAQ:TUBE) fell as much as 26% on Friday after the company issued guidance for the current quarter and the full year that fell well short of Wall Street's expectations.

So what:
In a research note, RBC Capital attributed the stock market's reaction to an "expectations miss" rather than "fundamentals." That's clear enough in the following table, particularly on guidance for the full year:



Consensus estimate

Q1 2015 Revenue

$28 million-$30 million

$32 million

Q1 2015 Adjusted EBITDA

($5 million) – ($3 million)

($3 million)

2015 Revenue

$142 million-$152 million

$154 million

2015 Adjusted EBITDA

($19 million) – ($9 million)

($17 million)

Source: Thomson Financial Network, Zacks Investment Research, TubeMogul.

Now what:
RBC Capital declared itself "Buyers (sic) of this 28% correction," and, given the magnitude of the decline, that might ordinarily be my inclination as well. However, investors ought to keep in mind that this is a speculative name. Programmatic video advertising is certainly a growth area, but TubeMogul's path to profitability remains cloudy. As one analyst told The Wall Street Journal:

The people in the space understand the nature of the business and they know that the unknowns are known, whereas the average institutional investor is really flying blind. ... The bigger problem with ad tech in general is that because it's evolving so quickly it's hard to know what's really going on.

As such, TubeMogul is anything but a high-visibility investment. Caveat emptor.