Magnite Inc Stock , MGNI
Magnite, Inc. provides a technology solution to automate the purchase and sale of digital advertising inventory for buyers and sellers. It features applications and services for digital advertising sellers including websites, mobile applications, and other digital media properties. The company was founded by Frank Addante, Duc Chau, Craig Roah, Julie Mattern and Brian D. Baumgart on April 20, 2007 and is headquartered in Los Angeles, CA.
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3 Reasons to Buy Magnite Stock, and 1 Reason to Sell
Stock for Magnite(NASDAQ:MGNI), which owns the top independent sell-side platform (SSP) for digital ads, has lost nearly 30% of its value over the past six months. Concerns about Apple's (NASDAQ:AAPL) privacy update for iOS, Alphabet's (NASDAQ:GOOG)(NASDAQ:GOOGL) upcoming ban on third-party cookies for Google Chrome, and Magnite's dependence on acquisitions have all caused investors to shun the stock.
However, Magnite recently addressed some of those concerns at an investor day event on Sept. 15. Let's review the main highlights, how they support three major reasons to buy Magnite's stock, and weigh them against a bearish take to see if the stock is still worth buying.
Image source: Getty Images.
1. Magnite has ambitious long-term plans
During its investor day, Magnite set a long-term growth target for more than 25% annual revenue growth with an adjusted EBITDA margin of 35%-40% -- which would represent a significant expansion from its adjusted EBITDA margin of 19% in 2020 and 26% in the first half of 2021.
Magnite estimates that over the next "five-plus" years it will process $15 billion to $20 billion in ad spending annually, compared to "several billion" dollars today. It aims to capture over 30% of the CTV (connected TV) advertising market, compared to a 20%-25% share today, as the entire programmatic CTV market expands from $9 billion to $50 billion. It also plans to grow its share of the DV+ (display, video, and other formats) market from the mid- to high-single digits to over 20%.
If Magnite can grow its revenue more than 25% annually over the next few years, its revenue would more than double from an estimated $421.5 million this year to over $1.03 billion in 2025. If it achieves its adjusted EBITDA margin target, it could generate $360 million to $412 million in adjusted EBITDA in 2025 -- compared to its adjusted EBITDA of just $43 million in fiscal 2020.
2. CTV will become Magnite's core business
In the first half of 2021, Magnite generated 29% of its ex-TAC (excluding traffic acquisition costs) revenue from CTV ads. Mobile ads accounted for 42% of that revenue, while desktop ads accounted for 29%.
Magnite's mobile business is vulnerable to Apple's recent iOS update, which lets users opt out of targeted ads. Its mobile and desktop businesses could also be hurt by Google's planned ban on all third-party cookies in Chrome (which collect data for targeted ads) in 2023. Magnite also faces plenty of competitors in both markets.
To pivot its business away from mobile and desktop ads, Magnite has been aggressively expanding its CTV platforms, which provide integrated ads for streaming video platforms like Roku, to profit from the growth of streaming services and the death of "linear TV" platforms like cable and satellite TV.
Magnite has focused on the expansion of its CTV business ever since it was created through the merger of two ad-tech companies, The Rubicon Project and Telaria, last April. That's why Magnite subsequently acquired two other CTV ad-tech companies -- SpotX and SpringServe -- this year.
During its investor day presentation, Magnite predicted that its CTV platform would generate the "majority" of its revenue in the future. Therefore, Magnite will likely continue to buy smaller CTV companies to expand the business and reduce the weight of its mobile and desktop ads.
3. Magnite has a reasonable valuation
Magnite's stock currently trades at 31 times forward earnings (on a non-GAAP basis) and nine times this year's sales. Those valuations look reasonable relative to its long-term growth potential.
The Trade Desk(NASDAQ:TTD), which sits on the opposite end of the ad supply chain as the world's top independent DSP (demand-side platform), trades at 86 times forward earnings and 29 times this year's sales. The Trade Desk isn't as dependent on acquisitions as Magnite, and analysts expect its revenue to rise 40% this year and 29% next year.
The reason to sell Magnite: A lack of insider confidence
Magnite's management has painted a rosy picture of the future, but it isn't backing up those claims with big stock purchases. Over the past 12 months, Magnite's insiders actually sold 1.69 million shares, while only purchasing 612,376 shares.
It's easy to see why Magnite's executives might want to take profits, since its stock price has more than quadrupled over the past 12 months. However, the lack of big insider purchases suggests that its near-term growth could remain tepid as it continues to expand its CTV business.
Do Magnite's strengths outweigh its weaknesses?
Over the past year, I've accumulated a position in Magnite with an average price of around $30 per share because I believe it still has plenty of room to expand in the CTV and DV+ markets.
I'm not too concerned about the insider sales or its near-term dependence on acquisitions, and I believe its organic growth should stabilize in the future as the CTV market expands. If you agree with those points, you should take a much closer look at this under-the-radar ad technology stock.
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Magnite Inc Stock Predictions
Magnite Inc (MGNI) is a Sell
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Magnite Inc Stock Forecast
- Over the next 52 weeks, Magnite Inc has on average historically risen by 48% based on the past 7 years of stock performance.
- Magnite Inc has risen higher in 3 of those 7 years over the subsequent 52 week period, corresponding to a historical accuracy of 42.86%
- Is Magnite Inc Stock Undervalued?
The current Magnite Inc [MGNI] share price is $30.40. The Score for MGNI is 46, which is 8% below its historic median score of 50, and infers higher risk than normal.
- MGNI is currently trading in the 40-50% percentile range relative to its historical Stock Score levels.
Will Magnite Inc Stock Go Up Next Year?
Over the next 52 weeks, Magnite Inc has on average historically risen by 48% based on the past 7 years of stock performance.
Is Magnite Inc Stock Overpriced?
Is Magnite Inc stock overvalued?
Magnite Inc stock is rated a Sell
- Magnite Inc has risen higher in 3 of those 7 years over the subsequent 52 week period, corresponding to a historical accuracy of 42.86%
- Based on the share price being above its 5, 20 & 50 day exponential moving averages, the current trend is considered strongly bullish and MGNI is experiencing buying pressure, which is a positive indicator for future bullish movement.
- Exchange: NASDAQ
- Country Name: United States
- Industry: Advertising Agencies
- Sector: Communication Services
- Type: STOCK
52 Week Data
- 52 Week High: 64.39000
- 52 Week Low: 8.38000
- Market Cap: 4B
- Price: USD 30.40
- Share Volume: 1.5M
- Beta: 2.16
- 50 Day Mov. Avg.: 29.12
- 100-Day Mov. Avg.: 30.39
- 200 Day Mov. Avg.: 35.23
- 52 Week Change: 233.88%
- Is Magnite Inc stock public?
Yes, Magnite Inc is a publicly traded company.
- What is the Magnite Inc stock quote today?
The Magnite Inc stock price is 30.40 USD today.
- How to buy Magnite Inc stock online?
14 Day Historical Data
Magnite Inc (NASDAQ:MGNI)
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MagniteNasdaqGS:MGNI Stock Report
Price History & Performance
|Historical stock prices|
|Current Share Price||US$30.40|
|52 Week High||US$8.38|
|52 Week Low||US$64.39|
|1 Month Change||5.85%|
|3 Month Change||3.30%|
|1 Year Change||226.53%|
|3 Year Change||708.51%|
|5 Year Change||275.31%|
|Change since IPO||51.32%|
Recent News & UpdatesOct 13
Calculating The Fair Value Of Magnite, Inc. (NASDAQ:MGNI)
Today we will run through one way of estimating the intrinsic value of Magnite, Inc. ( NASDAQ:MGNI ) by projecting its...
Magnite: Reasons To Invest In This Digital Ad Stock
Privacy changes cause investors to be fearful of investing in digital ad stocks. However, fundamentally, all the signs point to Magnite growing despite these headwinds. At 6x next year's revenues for this stock is cheap. Buying when others won't is a rewarding investment strategy.
Magnite Stock: Too Cheap To Ignore As Advertising Stocks Fall Out Of Favor
Magnite's share price has fallen more than 40% in the past six months on little to no justification. Magnite is on a path towards $450 million net revenues next year. The stock is now cheap at less than 9x net revenues for 2022.
Magnite: 6x Next Year's Sales, This Stock Is Now Too Cheap
All eyes are on CTV, and why this is an attractive space for ad tech companies. Ad tech companies are going through a difficult time in 2021. At less than 6x next year's sales, this stock is cheaply valued.
|MGNI||US Media||US Market|
Return vs Industry: MGNI exceeded the US Media industry which returned 21.2% over the past year.
Return vs Market: MGNI exceeded the US Market which returned 23.2% over the past year.
Stable Share Price: MGNI is not significantly more volatile than the rest of US stocks over the past 3 months, typically moving +/- 9% a week.
Volatility Over Time: MGNI's weekly volatility (9%) has been stable over the past year.
About the Company
Magnite, Inc. operates an independent sell-side advertising platform in the United States and internationally. The company’s advertising platform enables publishers to monetize various screens and formats, including CTV, desktop display, video, audio, and mobile, as well as allows agencies and brands to access brand-safe ad inventory and execute advertising transactions. It markets its technology solutions to buyers and sellers through a sales teams that operate from various locations.
Magnite Fundamentals Summary
|MGNI fundamental statistics|
Earnings & Revenue
|MGNI income statement (TTM)|
|Cost of Revenue||US$113.48m|
Last Reported Earnings
Jun 30, 2021
Next Earnings Date
Nov 03, 2021
|Earnings per share (EPS)||0.15|
|Net Profit Margin||6.07%|
How did MGNI perform over the long term?See historical performance and comparison
Is Magnite undervalued compared to its fair value and its price relative to the market?
Price to Earnings (PE) ratio
Share Price vs. Fair Value
Below Fair Value: MGNI ($30.4) is trading above our estimate of fair value ($24.36)
Significantly Below Fair Value: MGNI is trading above our estimate of fair value.
Price To Earnings Ratio
PE vs Industry: MGNI is poor value based on its PE Ratio (206.7x) compared to the US Media industry average (14.8x).
PE vs Market: MGNI is poor value based on its PE Ratio (206.7x) compared to the US market (17.8x).
Price to Earnings Growth Ratio
PEG Ratio: MGNI's earnings are forecast to decline next year, so we can't calculate its PEG ratio.
Price to Book Ratio
PB vs Industry: MGNI is overvalued based on its PB Ratio (4.5x) compared to the US Media industry average (2.1x).
How is Magnite forecast to perform in the next 1 to 3 years based on estimates from 10 analysts?
Forecasted annual earnings growth
Earnings and Revenue Growth Forecasts
Analyst Future Growth Forecasts
Earnings vs Savings Rate: MGNI's earnings are forecast to decline over the next 3 years (-117.4% per year).
Earnings vs Market: MGNI's earnings are forecast to decline over the next 3 years (-117.4% per year).
High Growth Earnings: MGNI's earnings are forecast to decline over the next 3 years.
Revenue vs Market: MGNI's revenue (25.7% per year) is forecast to grow faster than the US market (9.9% per year).
High Growth Revenue: MGNI's revenue (25.7% per year) is forecast to grow faster than 20% per year.
Earnings per Share Growth Forecasts
Future Return on Equity
Future ROE: MGNI's Return on Equity is forecast to be low in 3 years time (16.7%).
How has Magnite performed over the past 5 years?
Historical annual earnings growth
Earnings and Revenue History
Quality Earnings: MGNI has a large one-off loss of $38.5M impacting its June 30 2021 financial results.
Growing Profit Margin: MGNI became profitable in the past.
Past Earnings Growth Analysis
Earnings Trend: MGNI has become profitable over the past 5 years, growing earnings by 5.8% per year.
Accelerating Growth: MGNI has become profitable in the last year, making the earnings growth rate difficult to compare to its 5-year average.
Earnings vs Industry: MGNI has become profitable in the last year, making it difficult to compare its past year earnings growth to the Media industry (96.3%).
Return on Equity
High ROE: MGNI's Return on Equity (2.2%) is considered low.
How is Magnite's financial position?
Financial Position Analysis
Short Term Liabilities: MGNI's short term assets ($1.0B) exceed its short term liabilities ($873.7M).
Long Term Liabilities: MGNI's short term assets ($1.0B) exceed its long term liabilities ($779.9M).
Debt to Equity History and Analysis
Debt Level: MGNI's debt to equity ratio (81.4%) is considered high.
Reducing Debt: Insufficient data to determine if MGNI's debt to equity ratio has reduced over the past 5 years.
Debt Coverage: MGNI's debt is not well covered by operating cash flow (5.1%).
Interest Coverage: Insufficient data to determine if MGNI's interest payments on its debt are well covered by EBIT.
What is Magnite current dividend yield, its reliability and sustainability?
Dividend Yield vs Market
Notable Dividend: Unable to evaluate MGNI's dividend yield against the bottom 25% of dividend payers, as the company has not reported any recent payouts.
High Dividend: Unable to evaluate MGNI's dividend yield against the top 25% of dividend payers, as the company has not reported any recent payouts.
Stability and Growth of Payments
Stable Dividend: Insufficient data to determine if MGNI's dividends per share have been stable in the past.
Growing Dividend: Insufficient data to determine if MGNI's dividend payments have been increasing.
Current Payout to Shareholders
Dividend Coverage: Insufficient data to calculate payout ratio to determine if its dividend payments are covered by earnings.
Future Payout to Shareholders
Future Dividend Coverage: No need to calculate the sustainability of MGNI's dividend in 3 years as they are not forecast to pay a notable one for the US market.
How experienced are the management team and are they aligned to shareholders interests?
Average management tenure
Mr. Michael G. Barrett serves as Chief Executive Officer of Telaria Inc. He has been Chief Executive Officer of Magnite, Inc. (formerly known as The Rubicon Project, Inc.). since March 2017 and serves as i...
CEO Compensation Analysis
Compensation vs Market: Michael's total compensation ($USD3.51M) is below average for companies of similar size in the US market ($USD5.18M).
Compensation vs Earnings: Michael's compensation has been consistent with company performance over the past year.
Experienced Management: MGNI's management team is not considered experienced ( 1.5 years average tenure), which suggests a new team.
Experienced Board: MGNI's board of directors are not considered experienced ( 1.9 years average tenure), which suggests a new board.
Who are the major shareholders and have insiders been buying or selling?
Insider Trading Volume
Insider Buying: MGNI insiders have only sold shares in the past 3 months.
Recent Insider Transactions
Dilution of Shares: Shareholders have been diluted in the past year, with total shares outstanding growing by 19%.
Magnite, Inc.'s employee growth, exchange listings and data sources
- Name: Magnite, Inc.
- Ticker: MGNI
- Exchange: NasdaqGS
- Founded: 2007
- Industry: Advertising
- Sector: Media
- Market Cap: US$3.990b
- Shares outstanding: 131.25m
- Website: https://www.magnite.com
Number of Employees
- Magnite, Inc.
- 12181 Bluff Creek Drive
- 4th Floor
- Los Angeles
- United States
Company Analysis and Financial Data Status
|Data||Last Updated (UTC time)|
|Company Analysis||2021/10/13 22:40|
|End of Day Share Price||2021/10/13 00:00|
Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.
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