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Magnite (MGNI)
NASDAQ:MGNI
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Magnite
(NASDAQ:MGNI)68Neutral
Positive Factors
Financial Performance
Magnite anticipates over 10% growth in Contribution ex-TAC and a 100 basis points expansion in AEBITDA despite facing a built-in headwind from the absence of political ad spending.
Partnerships and Expansion
New partnership wins and new opportunity verticals (retail media, local TV, curation) should put some significant wind in Magnite’s sails.
Negative Factors
Market Sentiment
Soft Trade desk results plus the recent market sell-off have tempered both enthusiasm and the share price.
Magnite (MGNI) vs. S&P 500 (SPY)
Market Cap
$1.95B
Dividend YieldN/A
Average Volume (3M)2.94M
Price to Earnings (P/E)94.4
Beta (1Y)2.05
Revenue Growth7.82%
EPS GrowthN/A
CountryUS
Employees911
SectorCommunication Services
Sector Strength85
IndustryTraditional Media
Share Statistics
EPS (TTM)0.14
Shares Outstanding142,951,370
10 Day Avg. Volume3,267,828
30 Day Avg. Volume2,937,839
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)2.92
Price to Cash Flow (P/CF)4.30
P/FCF Ratio3.60
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$20.33Price Target Upside55.19% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering12
Magnite Business Overview & Revenue Model
Company DescriptionMagnite, Inc. (MGNI) is a leading independent sell-side advertising platform that specializes in programmatic advertising. The company operates in the digital advertising sector, providing technology solutions to publishers and broadcasters to manage and optimize their ad inventories. Magnite offers services across various channels, including desktop, mobile, audio, and connected TV (CTV), enabling media owners to maximize their advertising revenue through real-time auctions and sales automation.
How the Company Makes MoneyMagnite makes money primarily through fees charged on transactions conducted via its platform. The company earns revenue by taking a percentage of the ad spend that flows through its platform, which includes fees for facilitating the buying and selling of digital advertising inventory. Key revenue streams include supply-side platform (SSP) services for publishers, where Magnite provides the technology and infrastructure to manage and sell ad space programmatically. Additionally, Magnite benefits from strategic partnerships with media companies and broadcasters, which enhance its inventory offerings and attract more advertisers. The company's growth is supported by the increasing shift towards programmatic advertising and the rising demand for CTV and digital video advertising solutions.
Magnite Financial Statement Overview
Summary
Magnite's financial performance shows strong revenue growth and improved profitability. The income statement score is 75 with a significant improvement in net profit margin, while the balance sheet score is 68, indicating low financial leverage and stability. The cash flow score is 80, reflecting efficient cash management and healthy free cash flow growth. Overall, Magnite demonstrates a compelling financial profile with room for further profitability improvement.Income Statement
Magnite's income statement shows a strong revenue growth rate of 7.82% from 2023 to 2024, with a significant improvement in profitability. The gross profit margin stands at 61.25%, and the net profit margin has improved to 3.41% in 2024 from a net loss in previous years. The company has also managed to achieve positive EBIT and EBITDA margins of 7.64% each, indicating efficient operations and cost management.75
Positive
Balance Sheet
The balance sheet reflects a solid equity base, with a debt-to-equity ratio of 0.08, suggesting low financial leverage. The company has a strong equity ratio of 26.91%, indicating a stable financial structure. Return on equity is modest at 2.97%, highlighting room for profitability improvement. Overall, the balance sheet shows financial stability with manageable debt levels.68
Positive
Cash Flow
Magnite's cash flow statement indicates strong free cash flow growth and efficient cash management. Operating cash flow to net income ratio is robust at 10.32, and the free cash flow to net income ratio is impressive at 8.89, demonstrating healthy cash generation relative to net income. The free cash flow growth rate from 2023 to 2024 is 14.36%, highlighting the company's ability to generate liquidity.80
Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 668.17M | 619.71M | 577.07M | 468.41M | 221.63M | Gross Profit |
| 409.33M | 209.80M | 269.90M | 266.75M | 143.88M | EBIT |
| 51.09M | -155.01M | -100.00M | -6.20M | -16.91M | EBITDA |
| 51.09M | 115.64M | 109.72M | 71.40M | 12.57M | Net Income Common Stockholders |
| 22.79M | -159.18M | -130.32M | 65.00K | -53.43M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 483.22M | 326.22M | 326.25M | 230.40M | 117.68M | Total Assets |
| 2.85B | 2.69B | 2.71B | 2.71B | 938.96M | Total Debt |
| 58.71M | 606.65M | 813.86M | 809.25M | 42.09M | Net Debt |
| -424.51M | 280.43M | 487.61M | 578.85M | -75.58M | Total Liabilities |
| 2.09B | 1.99B | 1.92B | 1.83B | 557.35M | Stockholders Equity |
| 768.22M | 701.68M | 791.30M | 880.76M | 381.61M |
| Cash Flow | Free Cash Flow | |||
| 202.39M | 176.98M | 148.15M | 97.46M | -34.02M | Operating Cash Flow |
| 235.20M | 214.37M | 192.55M | 126.59M | -12.06M | Investing Cash Flow |
| -47.50M | -37.38M | -65.15M | -691.00M | 32.64M | Financing Cash Flow |
| 413.46M | -177.84M | -30.17M | 678.05M | 7.35M |
Magnite Technical Analysis
Negative
13.10
Price Trends
17.03
Negative
15.95
Negative
14.62
Negative
Market Momentum
-1.05
Positive
23.65
Positive
7.55
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For MGNI, the sentiment is Negative. The current price of 13.1 is below the 20-day moving average (MA) of 17.56, below the 50-day MA of 17.03, and below the 200-day MA of 14.62, indicating a bearish trend. The MACD of -1.05 indicates Positive momentum. The RSI at 23.65 is Positive, neither overbought nor oversold. The STOCH value of 7.55 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for MGNI.
Magnite Risk Analysis
Magnite disclosed 58 risk factors in its most recent earnings report. Magnite reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Magnite Peers Comparison
Overall Rating
UnderperformOutperform
Sector (59)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
73 Outperform | $2.05B | 19.19 | 10.43% | ― | -1.22% | 112.13% | |
68 Neutral | $1.95B | 94.41 | 3.10% | ― | 7.82% | ― | |
67 Neutral | $389.34M | 31.44 | 1.75% | ― | -32.95% | -89.11% | |
67 Neutral | $485.27M | 42.11 | 4.36% | ― | 9.08% | 43.58% | |
66 Neutral | $375.92M | ― | -101.69% | ― | -15.51% | -54.09% | |
63 Neutral | $32.20B | 83.16 | 15.37% | ― | 25.63% | 118.49% | |
59 Neutral | $30.54B | 0.25 | -13.23% | 4.04% | 2.36% | -49.53% |
* Communication Services Sector Average
Performance Comparison
MGNI
Magnite
13.10
1.75
15.42%
PERI
Perion Network
8.19
-14.38
-63.71%
CRTO
Criteo SA
36.66
3.18
9.50%
APPS
Digital Turbine
2.94
-0.17
-5.47%
TTD
Trade Desk
64.91
-16.54
-20.31%
PUBM
PubMatic
9.77
-10.60
-52.04%
Magnite Earnings Call Summary
Earnings Call Date: Feb 26, 2025 | % Change Since: -22.30% | Next Earnings Date: May 7, 2025
Earnings Call Sentiment Positive
Magnite's earnings call showed a strong financial performance and promising growth in CTV, supported by successful partnerships and technological advancements. However, the unexpected underperformance in the DV+ segment due to post-election demand drops presents a notable challenge. Despite this, the overall outlook remains optimistic with strategic initiatives aimed at driving further growth.Highlights
Record Financial Performance
Magnite achieved record highs with a contribution ex-TAC of $607 million, processed ad spend of over $6 billion, adjusted EBITDA of $197 million, and free cash flow of $118 million for the fiscal year 2024.
Strong CTV Growth
Connected TV (CTV) contribution ex-TAC increased 23% year-over-year for Q4, outperforming the guidance range of 18% to 21%. For the full year 2024, CTV contribution ex-TAC grew 19%.
Successful Partnerships and New Deals
Magnite saw significant growth from partnerships with Roku, LG, Vizio, Walmart, Disney, Fox, Warner Discovery, Paramount, and Netflix. The company also expanded its international sports business with partners like FIFA and Sky New Zealand.
AI and Technological Advancements
Magnite is set to release new client-facing tools powered by generative AI in 2025, aimed at optimizing ad requests and improving operational efficiencies.
Improved Cost Efficiency
The company achieved a 26% reduction in cost per ad request for DV+ and a 45% reduction for CTV in 2024, with plans for further efficiency improvements in 2025.
Lowlights
Disappointing DV+ Performance
DV+ contribution ex-TAC growth was only 1% for Q4, coming in below expectations due to unusual post-election spending patterns and a significant drop in CPMs by 15% to 20%.
Post-Election Demand Drop
There was a significant drop in demand and CPMs for DV+ post-election, which was inconsistent with previous election cycles, impacting the Q4 results.
Company Guidance
In the Magnite Fourth Quarter 2024 Earnings Call, the company reported significant financial achievements, including a record contribution ex-TAC of $607 million and processed ad spend exceeding $6 billion. The adjusted EBITDA reached $197 million, while free cash flow stood at $118 million, both marking record highs. The call highlighted a 23% year-over-year increase in CTV contribution ex-TAC for Q4, surpassing the guidance range of 18% to 21%, and a full-year growth of 19% in CTV contribution ex-TAC. Despite a disappointing DV+ performance with only 1% growth due to unusual post-election spending patterns, the company expressed optimism for 2025, citing a rebound in DV+ to mid to high single-digit growth. Additionally, the call underscored the significant growth from partnerships with major players like Roku, LG, Vizio, Walmart, Disney, Fox, Warner Discovery, and Paramount, along with the potential of Netflix’s expanding global ad tier. The company also focused on cost efficiency, reporting a 26% decrease in DV+ and a 45% reduction in CTV cost per ad request in 2024. Looking ahead, Magnite projected a greater than 10% growth in total contribution ex-TAC for 2025, with mid-teens growth excluding political factors, and anticipated a mid-teens growth in adjusted EBITDA, expanding margins, and free cash flow growth in the high teens to 20% range.Magnite Corporate Events
Executive/Board ChangesBusiness Operations and Strategy
Magnite Strengthens Leadership with Key Appointments
Positive
Dec 12, 2024
Magnite, Inc. has appointed Sean Buckley as President, Revenue and Katie Evans as President, Operations, promoting them from their prior roles as Chief Revenue Officer and Chief Operating Officer, respectively. These leadership changes reflect Magnite’s strategic focus on enhancing its executive team to strengthen its position in the competitive digital advertising industry, particularly in the connected TV space.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.