NEW YORK (TheStreet) -- Millennial Media (MM) shares are plummeting, down -42% to $3.10 after missing analysts first quarter revenue estimates and reporting second quarter revenue guidance well below analysts estimates.
The independent mobile advertising platform saw a 47% increase in revenue to $72.6 million, missing analysts consensus revenue estimates of $75.5 million.
The company posted a net income loss of $12.9 million, or -12 cents per diluted share, a -7 cent decline from the loss it posted last year.
The company also lowered its second quarter guidance to between $70 million and $75 million, below analysts consensus estimates of $96.2 million.
TheStreet Ratings team rates MILLENNIAL MEDIA INC as a Sell with a ratings score of D. TheStreet Ratings Team has this to say about their recommendation:
"We rate MILLENNIAL MEDIA INC (MM) a SELL. This is driven by some concerns, which we believe should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks we cover. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income, disappointing return on equity, weak operating cash flow, generally disappointing historical performance in the stock itself and feeble growth in its earnings per share."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Internet Software & Services industry. The net income has significantly decreased by 245.2% when compared to the same quarter one year ago, falling from $2.55 million to -$3.70 million.
- The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. Compared to other companies in the Internet Software & Services industry and the overall market, MILLENNIAL MEDIA INC's return on equity significantly trails that of both the industry average and the S&P 500.
- Net operating cash flow has significantly decreased to -$20.30 million or 616.80% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
- The share price of MILLENNIAL MEDIA INC has not done very well: it is down 7.93% and has underperformed the S&P 500, in part reflecting the company's sharply declining earnings per share when compared to the year-earlier quarter. The fact that the stock is now selling for less than others in its industry in relation to its current earnings is not reason enough to justify a buy rating at this time.
- MILLENNIAL MEDIA INC has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. The company has reported a trend of declining earnings per share over the past two years. However, the consensus estimate suggests that this trend should reverse in the coming year. During the past fiscal year, MILLENNIAL MEDIA INC reported poor results of -$0.19 versus -$0.07 in the prior year. This year, the market expects an improvement in earnings (-$0.10 versus -$0.19).
- You can view the full analysis from the report here: MM Ratings Report