Marin Software's Tal Nathan makes a presentation
Source: Marin Software Facebook

Should You Buy or Sell Marin Software (MRIN) Stock?

Mohit Oberoi, CFA - Author

Jun. 30 2021, Published 6:28 a.m. ET

Marin Software (MRIN) stock rose over 130 percent on Jun. 29, but was lower in premarket trading on Jun. 30. What’s the forecast for MRIN, and should you buy or sell the stock?

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MRIN stock hit a 52-week high of $18.82 on Jun. 29 and closed at $17.30. The stock is 1,400 percent above its 52-week low of $1.14.

Why has MRIN stock risen?

In 2021, several penny stocks have been boosted by mentions on Reddit groups. At below $5 last week, MRIN was, by definition, a penny stock. Then the company announced it had could support Instacart Ads.

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In its announcement, the company revealed its $40 billion global ad spending. “As the leading online grocery platform in North America, Instacart is a must-have part of digital marketing strategies. We are delighted to give advertisers on Instacart the power of MarinOne to maximize return on their investment,” said chairman and CEO Chris Lien. MRIN stock soared on the news.

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MRIN stock mentions on Reddit

A new subreddit was created on Jun. 25 to discuss MRIN stock, and it now has 450 members. A post in the group highlighted the stock's high short interest, and some commenters think MRIN could hit $20.

Reddit group WallStreetBets has been behind many short squeezes this year, pumping up Clover Health, GameStop, and AMC Entertainment. However, MRIN doesn't seem to be popular in the group.

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MRIN stock on StockTwits

MRIN stock is getting popular on Stocktwits as well. A user by the name Aigner_Andreas with over 3,200 followers thinks a golden cross is forming in the stock, where its 50-day SMA (simple moving average) crosses above its 200-day SMA.

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marin software mrin stock golden cross
Source: TIKR

MRIN stock golden cross

The golden cross is a lagging indicator that signals long-term bullishness. Its opposite is the death cross, where an asset's 50-day SMA (simple moving average) crosses below its 200-day SMA. Bitcoin recently saw a death cross.

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MRIN's stock forecast

Despite rallying over the last week, MRIN has a market capitalization of only $189 million. Wall Street analysts generally don’t provide ratings or forecasts for such small companies.

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It's worth noting, however, that in each of the last five years, MRIN’s revenue has fallen and it has posted a loss. In 2020, the company's revenue fell 39 percent year-over-year to around $30 million, and it reported a net loss of $14.05 million.

Furthermore, MRIN's 2020 price-to-sales multiple is 6.3x, which would be justified if MRIN were a high-growth tech company—but it's not. While its Instacart capabilities are bullish, the stock has run up too far, and there's no margin of safety at these prices. The stock looks like a sell now after the rally.


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