• by Tyler Loechner  @mp_tyler, March 11, 2015

BMO Capital Markets has given TubeMogul stock an “outperform" rating, citing the company’s strong self-serve offering, which lines up with the macro trend of agencies and brands taking programmatic ad technology in-house.

TubeMogul, a programmatic video ad platform, announced its fourth-quarter 2014 earnings the other week. Despite beating revenue estimates, shares of TubeMogul plummeted following the earnings report.

BMO notes that the three main reason TubeMogul shares have faltered include the fact that one-third of its revenue is non-U.S., some investors are worried that a  “cash burn” is taking place at TubeMogul, and that agencies are taking programmatic ad-buying “in-house.”

On the last point, BMO writes: “This is a misunderstanding about the nature of full/managed services models versus self-service; TubeMogul often is the ‘in-house’ tool being used for video buying by agency trading desks.”

“All told, we think these risks are overdone at this valuation considering the industry’s continued shift to self-service models and TubeMogul’s continued momentum with some of the world’s largest brands,” adds BMO.

Among those brands is Mondelez, which used TubeMogul’s video platform to buy local Super Bowl spots in 2015 for both Oreo and Ritz.

In a similar vein, BMO highlights TubeMogul’s push in the programmatic TV space as another reason for the “outperform” rating. TubeMogul CEO Brett Wilson acknowledged in the fourth quarter earnings call that the company doesn’t expect programmatic TV to be a “material revenue generator” in 2015 -- something BMO agrees with -- but BMO still notes that programmatic TV “remains a significant area of investor curiosity.”

BMO has a price target of $20 for shares of TubeMogul, which were trading at $12.01 per share when BMO issued its note. TubeMogul was trading at over $20 per share in early January, and has a 52-week high and low of $23.83 and $8.15, respectively.