Rocket Fuel Inc (NASDAQ:FUEL) is this Digital Technology Company ready for lift-off (pardon the pun)? The first thing you need to know about FUEL is that it wants to turn digital marketing into rocket science. The company has been continually looking for ways to take emerging new technologies – including big data, predictive analytics and the cloud – and apply that to the types of challenges facing marketers and agencies.
The key for investors, of course, is to separate hype from reality. And right now investors are starting to believe the hype. Shares of California-based Rocket Fuel are currently trading at $5.24, giving the company a market capitalization of $267.41 million.
Rocket Fuel Inc (NASDAQ:FUEL) has over the most recent 52-week period, traded as low as $1.70 and as high as $5.38. So FUEL is now pushing the upper boundaries of its 52-week high. Can it achieve lift-off and break through that resistance band?
Of late, the answer has been a resounding “yes.” FUEL is up a staggering 206.43% YTD. Over the past 30 days, FUEL is up 75.25%. Clearly, investors are starting to pile into the stock.
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The latest news from the company, announced on March 21, is a new partnership with IBM Watson to take some of the artificial intelligence (AI) technology powering the IBM Watson supercomputer, and use that to power the world’s marketing platforms. With the new IBM Watson technology, Rocket Fuel will take the next step beyond just using a lot of data (“big data”) and a lot of fancy analytics packages to make sense of it all. It will now use AI to solve digital marketers’ toughest challenges.
What does all this mean in practical terms? It basically means that marketers are going to become a lot smarter about keywords that consumers are using during the purchase decision. It means that marketers will have greater insights into brand sentiment on a real-time basis.
That may not sound like a big idea at first, but it’s all part of a larger trend in the digital marketing space, and that’s delivering the right message to the right customer at the right time. If you do that right often enough, you’re going to convert more customers and boost your sales.
It’s all part of Rocket Fuel’s mission of delivering and optimizing media spend to engage, up-sell and retarget consumers across any channel (display, mobile, video) and any digital device (tablet, TV, mobile). The company has continually been looking for ways to improve its core Programmatic Marketing Platform, which helps marketers and agencies connect with consumers via digital media. The buzzword before AI was “predictive analytics.” And the buzzword before that was “big data.”
Ok, so this really is starting to sound like rocket fuel, right? Well, the company also announced its FY 2016 numbers on March 22, and they weren’t nearly as impressive as you might expect. Revenue in 2016 was $456 million, compared to $461 million in 2015. Gross profit was down, from $192 million in 2015 to $166 million in 2016. And, most disappointingly, the company actually posted a net loss of $65.7 million for the year.
On March 1, the company also announced the opening of its Prague office, as part of Rocket Fuel’s growing global expansion. FUEL will now have 25 offices in 10 countries. So the company is clearly growing quickly and adding more global clients for its solutions.
The only question is whether FUEL is a global technology company or a global advertising and marketing company. If the answer is the former, then the company really could be a rocket ship that’s worthy of being on your stock radar. One thing is certain – it has certainly already been a rocket ride in 2017. For more news on Rocket Fuel (NASDAQ: FUEL) and other fast-moving penny stocks, please subscribe to OracleDispatch.com below.