1-Star Stocks Poised to Plunge: Millenial Media?
Sep 27th 2012 11:27AM
Updated Sep 27th 2012 11:28AM
Based on the aggregated intelligence of 180,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, mobile advertising solutions specialist Millenial Media (NYS: MM) has received the dreaded one-star ranking.
With that in mind, let's take a closer look at Millenial Media's business and see what CAPS investors are saying about the stock right now.
Millenial Media facts
|Headquarters (founded)||Baltimore, Md. (2006)|
|Market Cap||$1.1 billion|
|Industry||Internet software and services|
|Trailing-12-Month Revenue||$132.1 million|
|Management||Co-Founder/CEO Paul Palmieri
Co-Founder/Chief Technology Officer John Brandenburg
|Trailing-12-Month Operating Margin||(4%)|
|Cash/Debt||$123.5 million / $0|
Sources: S&P Capital IQ and Motley Fool CAPS.
On CAPS, 27% of the 33 members who have rated Millenial Media believe the stock will underperform the S&P 500 going forward.
At [120x] forward earnings, they are much more expensive than competitors like Google, Yahoo, Apple, etc. But unlike those companies and Facebook, they are a pure advertising company without their own content platform. That seems like a major competitive problem! [Millenial Media's] price is based on the assumption they can achieve margins comparable to elite content/advertising competitors and that is not going to happen.
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The article 1-Star Stocks Poised to Plunge: Millenial Media? originally appeared on Fool.com.Fool contributor Brian Pacampara owns no position in any of the companies mentioned. The Motley Fool owns shares of Apple, Google, and Facebook. Motley Fool newsletter services have recommended buying shares of Apple, Google, and Facebook, as well as creating a bull call spread position in Apple. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Fool's disclosure policy always gets a perfect score.
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