What’s Hurting The Rubicon Project Inc (RUBI)
It’s a hard pill to swallow for shareholders of California-headquartered company The Rubicon Project Inc (NYSE:RUBI) as its shares dropped more than 15% in after-hours trading this Tuesday on weak guidance for the ongoing quarter. However, on a positive note, RUBI reported better than expected results for the fourth quarter — actual EPS and revenue of $0.37 and $66.87 million versus the expected $0.17 and $63.6 million, but well below its year-ago-quarter’s results of $0.72 and $83.7 million. “We executed well against our revised outlook for the fourth quarter, posted solid 2016 financial results, and made significant progress with products and customers during the year, despite the many challenges we faced”, said company founder and chairman Frank Addante. “As we move into 2017, we remain focused on signing up more publishers, application developers, and adding inventory to our global exchange, a key component to drive future growth”, he added. Founded in 2007, Rubicon provides a marketplace to buy and sell advertising. The company saw steep growth over the past five years — revenue rose from $57.1 million during FY’12 to $278.2 million for FY’16 (ended December). Over the past year, though, revenue grew only 12% and is now expected to drop over the next few years before tracking an upward trajectory, based on sell-side analysts’ consensus estimates. The slowing down revenue growth has hurt the company with its market capitalization cut by nearly 60% in less than a year.