This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Rocket Fuel Fizzles, but Will Fly Again: StockTwits

NEW YORK (TheStreet) -- Rocket Fuel (FUEL - Get Report) made the negative headlines all too easy to write. The digital advertising company, whose motto is "artificial intelligence, real results," failed to deliver the first-quarter results that investors wanted.

$FUEL Misguided missile

? Teresa Charpentier (@Caviar) May. 9 at 11:24 AM

$FUEL this rocket has no fuel - target 18

? Old Turkey (@Partridge) May. 9 at 09:26 AM

The stock fell nearly 22% by the close Friday, to just under $22-per-share -- and continued to fall after-hours. A handful of analysts, including oft-watched Goldman Sachs, cut price targets in the wake of declining revenue growth. The company guided for revenue growth Thursday evening of between 62% and 69% in the second quarter of 2014. The projected growth was a substantial slowdown from the 95% year-over-year growth seen in the first quarter.

But investors on said Friday that the stock shouldn't have crash landed. Sentiment on the stock was 70% bullish, according to StockTwits' analytics.

$FUEL In at $20.25. My quick simple validation says this is oversold. My target is $30

? Chris Marc (@chris00nj) May. 9 at 03:43 PM

Earnings weren't exactly bad. Rocket Fuel reported a smaller-than-expected earnings per share loss of 18 cents, excluding some items. Consensus estimates called for a loss of 30 cents. Revenues, however, were light. The company reported $74.4 million instead of the $76.2 million analysts had anticipated, according to stats on the Analyst Ratings Network.

Rocket Fuel said sales would come in in between $88 million and $92 million. It guided for a loss of between $6 million and $4.5 million. That wasn't enough for some analysts to justify the company's valuation. After Friday's fall, the company still had a $739.6 million market cap. It trades at 57 times expected 2015 earnings.

Goldman Sachs downgraded the company today to neutral from buy. The analyst lowered the price target from $69 to $25 per share, citing concerns about declining average customer spending, according to the Analyst Ratings Network. BMO Capital Markets also downgraded the stock from outperform to market perform with a $25 target. Oppenheimer analysts maintained an outperform rating but lowered their price target to $44 per share. Evercore Partners reiterated an equal-weight rating and cut its target from $30 to $17 per share.

On Friday, StockTwits' investors said the ratings cuts were overdone. They argued that Rocket Fuel still expects to be profitable this year -- which is more than can be said for other hot IPO companies. Rocket Fuel management guided to profits somewhere between $3 million and $6 million on more than $420 million in sales.

1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
FUEL $2.68 0.00%
AAPL $94.19 0.00%
FB $118.06 0.00%
GOOG $695.70 0.00%
TSLA $222.56 0.00%


Chart of I:DJI
DOW 17,651.26 -99.65 -0.56%
S&P 500 2,051.12 -12.25 -0.59%
NASDAQ 4,725.6390 -37.5850 -0.79%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs