Cantor Fitzgerald’s Youssef Squali expects The Rubicon Project Inc RUBI to benefit going forward from the “secular tailwinds” in digital advertising.
The analyst initiated coverage of the company with a Buy rating and price target of $22.
Advertising Tailwinds
“While operating in a highly competitive segment, the company has differentiated itself by focusing on premium programmatic offerings, making it a compelling independent provider in a segment dominated by larger companies,” Squali mentioned.
The analyst pointed out that with the ongoing shift from offline to digital advertising, the digital segment accounts only for 26 percent of the global ad market at present but is growing rapidly.
“Within digital, programmatic ad buying is one of the fastest-growing segments, with $10.3 billion in global RTB and $3.7 billion in global direct order spend in 2015, and these sub segments are expected to grow at 19 percent and 74 percent CAGRs through 2019, respectively,” according to the Cantor Fitzgerald report.
Lucrative Opportunity
Squali pointed out that the most lucrative opportunity for the company would come from orders/programmatic premium ad units, which represented a market opportunity of $3.7 billion in 2015 but was expected to grow at a CAGR of 74 percent through 2019.
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