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Is Marin Software stock price heading further on back of US pre-market demand?


Shares in advertising technology specialist Marin Software (NASDAQ:MRIN) have had a phenomenal week so far rewarding investors who got in at under two bucks with huge gains. The $82m market cap tech stock was up over 20% in the pre-market as we headed into the US trading session.

Marin Software stock was trading at around the $1.74 mark last week, but since then has seen several legs up as we proceeded through the weekend. At time of writing it did not look like it was in any danger of losing momentum and we are continuing to see hundreds of investors looking to get into the share.

Marin Software upgrade for Instacart driving interest

The San Francisco-based company seems to be attracting attention due to technical enhancements it made to its MarinOne platform that allows it to be used with Instacart. This is an online grocery platform that delivers groceries from around 55,000 stores in the US and Canada. European investors may be familiar with a similar concept from Ocado.

Instacart has partnered with more than 600 retailers in North America. It launched self-service advertising in May 2020. This allows advertisers to promote products to appear at the top of their search results. and throughout the buying journey.

According to Marin Software, the changes it made will allow advertisers to better optimise some $40bn in advertising that is currently geared to targeting buyers who may buy additional items around their purchasing behaviour.

The MarinOne update unifies lower funnel Instacart advertising with paid search and paid social campaigns to help generate further demand. Marketers align efforts across channels to ensure they are working seamlessly.

Interest in MRIN stock still seems to be picking up

Interest in MRIN stock among traders really began picking up heavily in US trading hours, although there was evidence of some early adopters buying stock around 24 June. That sentiment was dwarfed as we moved into the new week and more traders piled into what is starting to exhibit the characteristics of yet another meme stock.

Marin Software does not have an earnings date until 12 August. It previously reported $27m in revenue. There are slightly less than 11m shares outstanding but average three month volume is in the 8m bracket already. This looks like unprecedented activity in a stock which is already easily up over 400% in 12 months.

MRIN revenues were declining over past year

Latest results were out last month: they showed net revenues totalled $6.3m, which was a year over year decrease of 27% when compared to $8.7m in the first quarter of 2020. Forward looking guidance for the three months ended June 30 was a gain in net revenues from $5.5m to $6m.

One of the big questions will be at what level early adopters will take profits, and how many of them there will be. This could seriously reverse the share price. Looking at the investor patterns behind the stock, this does look like a situation where a small but significant number of investors grabbed stock in the $2 – $2.50 level and where more have poured in on the back of the obvious momentum in the last couple of trading sessions.

Pre-market trading is supportive of further buying in the first half of the US trading session. The stock looks like it is in more demand than it was, but it is exhibiting classic meme identifiers that have pushed it well outside of the pricing we would expect based on fundamentals.

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This article does not constitute investment advice. Do your own research or consult a professional advisor.

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