Marin Software Incorporated (MRIN) and its subsidiaries provide enterprise marketing software for advertisers and agencies in the United States, the United Kingdom, and internationally. Its platforms are MarinOne, Marin Search, and Marin Social. Its market capitalization is $32.73 million.

On August 22, 2022, MRIN declared its integration with Snap Inc. (SNAP). MRIN’s MarinOne platform aims to optimize SNAP’s ad campaigns with leading AI bidding, budget pacing, forecasting, performance insights, and recommendations.

Chris Lien, MRIN’s Chairman and CEO, said, “We look forward to providing our customers an avenue to integrate our powerful reporting, advanced bidding, and campaign management tools to achieve the best performance on the Snapchat platform.”

Over the past month, the stock has gained 12.6% to close the last trading session at $2.05. However, it has lost 65.4% over the past year and 44.7% year-to-date.

Here is what could shape MRIN’s performance in the near term:

Exhausted Financials

For the second quarter ended June 30, 2022, MRIN’s net revenues came in at $4.72 million, down 22.5% year-over-year. Its gross profit came in at $1.52 million, down 48% year-over-year. Also, its loss from operations increased 85.9% year-over-year to $5.60 million.

Moreover, its non-GAAP net loss came in at $4.39 million, up 91.9% year-over-year, while its non-GAAP loss per share came in at $0.28, up 33.3% year-over-year.

Poor Profit Margins

MRIN’s trailing-12-month gross profit margin of 40.83% is 18.6% lower than the industry average of 50.17%. Its trailing-12-month negative EBIT, EBITDA, and net income margins of 88.40%, 74.14%, and 71.25%, are significantly lower than the industry averages of 7.42%, 13.05%, and 4.25%, respectively.

Moreover, MRIN’s trailing-12-month ROCE, ROTC, and ROTA of negative 56.51%, 35.48%, and 30.26%, compare with the industry averages of 7.28%, 3.96%, and 2.74%, respectively.

POWR Ratings Reflect Bleak Prospects

MRIN has an overall rating of D, equating to Sell in our proprietary POWR Ratings system. The POWR Ratings are calculated by considering 118 different factors, with each factor weighted to an optimal degree.

The stock has a D grade for Stability, in sync with its 24-month beta of 2.57.

MRIN has a D grade for Momentum. It’s currently trading below its 200-day moving average of $2.95.

In the 153-stock Software – Application industry, MRIN is ranked #95. The industry is rated F.

Click here for the additional POWR Ratings for MRIN (Growth, Value, Sentiment, and Quality).

View all the top stocks in the Software – Application industry here.

Bottom Line

MRIN recently partnered with SNAP to develop the company’s marketing strategies. However, its arid financials and bleak profit margins are concerning. Moreover, MRIN has lost 82% since hitting its 52-week high of $11.42 on September 24, 2021. Therefore, I think MRIN might be best avoided now.

How Does Marin Software Incorporated (MRIN) Stack Up Against its Peers?

While MRIN has an overall POWR Rating of D, one might consider looking at its industry peers, IBEX Limited (IBEX), which has an overall A (Strong Buy) rating, and Brightcove Inc. (BCOV), Model N, Inc. (MODN), and Open Text Corporation (OTEX), which have an overall B (Buy) rating.

MRIN shares were trading at $1.89 per share on Friday afternoon, down $0.16 (-7.60%). Year-to-date, MRIN has declined -49.06%, versus a -13.60% rise in the benchmark S&P 500 index during the same period.

Riddhima is a financial journalist with a passion for analyzing financial instruments. With a master's degree in economics, she helps investors make informed investment decisions through her insightful commentaries.

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