Shares of online advertising software and strategies developer PubMatic, Inc. (PUBM) have gained about 43% so far this year. Driven by fast-growing advertising formats on mobile and omnichannel video, the company recently delivered better-than-expected Q3 performance.
Significantly, PUBM witnessed a triple-digit year-over-year jump in earnings per share during this period. Keeping these developments in mind, let us take a look at the changes in PUBM’s key risk factors that investors should know.
Risk Factors
According to the TipRanks Risk Factors tool, PUBM’s top risk category is Finance & Corporate, accounting for 26% of the total 61 risks identified. In its recent Q3 report, the company updated two key risk factors.
Under the Finance & Corporate risk category, PUBM noted that if it does not manage its growth effectively, then the quality of its platform and solutions offered may take a hit, affecting PUBM’s business, results, and financials.
Similarly, under the Ability to Sell risk category, PUBM highlighted that the digital advertising industry is extremely competitive. If the company does not compete effectively against present or future competitors, then its results and financial condition may suffer adversely.
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Some of PUBM’s competitors have better brand recognition, greater resources and have been present in the market longer than PUBM. Additionally, some of PUBM’s competitors may choose to go with predatory pricing which could cause the company to lose market share and revenue, or force it to lower its own prices, resulting in reduced margins.
Against a sector average of 14%, PUBM’s Ability to Sell risk factor is at 23%.
Wall Street’s Take
Consensus on the Street is a Strong Buy based on 8 Buys and 1 Hold. The average PubMatic price target of $52.13 implies a potential upside of 31.14% for the stock.
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