RetailMeNot Inc (NASDAQ:SALE) shares are up 17% today after the company reported better than expected firsts-quarter earnings results, with revenue of $60.4 million that came in above the Street at $58.7 million, and the $57-60 million guide.

In light of the earnings beat, RBC Capital analyst Mark Mahaney has become more optimistic about SALE, raising the price target to $21 (from $17), while reiterating a Perform rating on the stock. With RetailMeNot shares last trading at $20.15, Mahaney’s new price target implies potential upside of 4%.

In his research report, Mahaney wrote, “SALE is beginning to see meaningful Mobile traction, which, coupled with meaningful salesforce investments in Q1 that take 3-6 months to ramp, could lead to a strong back half of the year. Nevertheless, near term investments and seasonality led to a weak Q2 guide. We believe that Mobile is leading to incremental usage, but usage that is tougher to monetize for ad-based models.”

Bottom line: “We view the long-term market opportunity as intact and see a business model that should be able to sustain relatively high EBITDA margins (30%+). So, we’ll maintain our Sector Perform. Evidence of severe commission pressures could make us Bearish and evidence of real progress against Google and Mobile challenges could make us Bullish.”

According to, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Mark Mahaney has a total average return of 22.3% and a 64.1% success rate. Mahaney has a -41.4% average return when recommending SALE, and is ranked #13 out of 3589 analysts.

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