Rocket Fuel

Summary Stock has fallen 36% in two months. Has a huge total addressable market in programmatic advertising. Move into mobile should boost revenues. At 5X 2014 revenues, seems fairly valued on a relative basis. "I expect programmatic to slow down in the same way people stopped trading on exchanges and went back to handing pieces of paper back and forth for selling stocks. The Pandora's box is open..." - Rocket Fuel CFO Peter Barwick in an interview on AdExchager Wall Street can be a fickle place. Two short months ago programmatic advertising company Rocket Fuel (FUEL) hit an all time intraday high of $72. ...... http://seekingalpha.com/article/2107673-rocket-fuels-fall-from-grace-may-be-temporary

Income Statement http://finance.yahoo.com/q/is?s=fuel

..... the general indication is that digital ads will increasingly move to programmatic platforms due to growing complexity. Rocket Fuel aims to provide the right ad to the right person at the right time using big data and machine learning. These ads are delivered to customers in an automated, real-time process that learns from the results of the last ad and optimizes the performance. The fourth-quarter results again back up the benefits of this system with revenue surging more than 100% over last year. The results finish off a stellar four-year period where Rocket Fuel grew from virtually nothing to reach revenue of $240 million. For 2013, revenue growth surged 126%. Huge market opportunity Even with the stellar growth, Rocket Fuel is only a tiny fish in the massive ocean of advertising. According to the slide below from the recent Rocket Fuel presentation, the advertising market now reaches $490 billion in annual spending, with digital advertising still less than 10% of the total ad market. Even more important, Rocket Fuel is only a tiny fraction of the digital ad market, leaving tons of room for growth. ...... The recent growth of Rocket Fuel and the resurgence of Millennial Media places an emphasis on the shift in multi-channel advertising toward real-time bidding, or RTB, and programmatic exchanges. Rocket Fuel saw an exceptional 721% growth of mobile, social, and video ads, highlighting the shift in the market that gets more complex on a daily basis. The issue with these new forms of advertising is that the area of focus constantly shifts within social sites and between mobile devices; a human optimizing a campaign can't possibly keep up. Millennial Media estimates that it serves ads to 9,000 mobile device types over a profile base of 625 million users that need to be taken into account in marketing decisions. Rocket Fuel estimates that it can analyze, in real-time, more than 1,000 simultaneous ad campaigns with millions of attributes to make automated decisions on more than 450,000 bid requests per second. The competitive advantage is clear in the numbers, with Rocket Fuel having a revenue retention rate of 168% in 2013. This means that customers in 2012 spent 68% more on its services during 2013. On top of that, gross margins surged roughly 600 basis points for the year, showing that Rocket Fuel was adding business at more profitable margins. Bottom line The key takeaway is that Rocket Fuel is only taking off and it will be years before the explosive growth of programmatic buying of digital ads slows down. Yet, despite the explosive growth and big-data tag, the stock only trades at around five times estimated revenue..... http://www.fool.com/investing/general/2014/02/24/rocket-fuel-only-taking-off.aspx

F....inancial and Business Highlights for the Fourth Quarter of 2013 Revenue of $85.6 million increased 113% compared to $40.1 million for the fourth quarter of 2012. Revenue less media costs1 of $49.6 million increased 148%, compared to $20.0 million for the fourth quarter of 2012, growing to 58% of revenue for the current quarter. Gross Profit of $41.6 million increased 144% compared to $17.1 million over the prior year period representing a Gross Margin improvement to 49% from 43%, a 601 basis point expansion. Net Loss was $(2.2) million, or $(0.07) per diluted share, as compared to a net loss of $(5.9) million, or $(0.72) per diluted share in the fourth quarter of 2012. Adjusted net income1 for the quarter was $2.4 million, or $0.06 per diluted common share, as compared to adjusted net loss of $(1.9) million, or $(0.23) per diluted share in the fourth quarter of 2012. Adjusted EBITDA1 income was $5.3 million compared to a loss of $(1.3) million in the fourth quarter of 2012...... http://investor.rocketfuel.com/releasedetail.cfm?ReleaseID=805601