BMO Capital Markets Ups Rocket Fuel Target To $18

Following Rocket Fuel’s strong Q3 earnings report, BMO Capital Markets has increased its target on shares of FUEL from $17 to $18. BMO writes in a note that the boosted target point is “due to slightly higher estimates and a slightly higher multiple for progress on the self-serve platform.”

BMO adds that it believes [x+1]’s technology will add “important functionality to FUEL’s self-serve platform (Mission Control),” adding that the offering is seen as “highly important to maintaining exceptional top-line growth.”

Rocket Fuel had struggled to get “in” with self-serve marketers prior to acquiring [x+1], attributing its post-Q2 earnings stock drop to “tighter control of client spend by the agencies’ internal trading desks and a shift toward direct licensing by advertisers….”



Shares of Rocket Fuel spiked following its Q3 earnings, though BMO believes the jump was “largely a short squeeze” and that nothing “material” had changed to significantly alter BMO’s stance on the company. Rocket Fuel successfully closed the [x+1] deal ahead of schedule, which BMO called a “positive.” However, BMO speculates the integration process between [x+1] and Rocket Fuel “likely caused some distraction leading to a sequentially flat number of active customers (1,446 vs. 1,444 in 2Q14.)”

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