Magnite (MGNI) AI Stock Analysis

• Market Cap: $1.55B
• Dividend Yield: N/A
• Average Volume (3M): 3.00M
• Price to Earnings (P/E): 78.2
• Beta (1Y): 2.10
• Revenue Growth: 7.82%
• EPS Growth: N/A
• Country: US
• Employees: 905
• Sector: Communication Services
• Sector Strength: 98
• Industry: Advertising Agencies
• EPS (TTM): 0.14
• Shares Outstanding: 142,951,370
• 10 Day Avg. Volume: 2,935,781
• 30 Day Avg. Volume: 3,000,889
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): 2.85
• Price to Cash Flow (P/CF): 4.10
• P/FCF Ratio: 3.50
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $20.33
• Price Target Upside: 108.73% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 10

Magnite shows strong financial performance with significant revenue and cash flow growth, positioning it well within the traditional media industry. However, technical indicators suggest short-term caution, and the high P/E ratio raises valuation concerns. The positive outlook from the earnings call is tempered by challenges in the DV+ segment, resulting in a balanced overall score.

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.

Growth Potential

CTV revenues grew 23% year-over-year in the fourth quarter, indicating strong growth in this segment.

Market Position

Magnite continues to take SSP share across the board, with another near-term opportunity depending on how the Google adtech trial plays out.

Negative Factors

Demand Fluctuations

Magnite experienced weak post-election demand in its DV+ segment, leading to a 15%-20% decline in CPMs across all demand side platforms.

Market Expectations

Magnite reported Q4 Contribution ex-TAC of $180.2 million, which was below the consensus of $184.1 million and guidance of $182.0 million to $186.0 million.

Market Uncertainty

The current market is not falling off a cliff, but there remains uncertainty.

Magnite Business Overview & Revenue Model

Company Description

Magnite, 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 Money

Magnite 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 presents a compelling financial profile with strong revenue growth, improved profitability, and effective cash flow management. The company maintains a stable balance sheet with low leverage and sufficient equity. While profitability metrics show improvement, there is potential for further enhancement in return on equity.

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.

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.

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.

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

• Technical Analysis Sentiment: Negative
• Last Price: 9.74
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Positive
• STOCH: 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 9.74 is below the 20-day moving average (MA) of 11.69, below the 50-day MA of 14.83, and below the 200-day MA of 14.50, indicating a bearish trend. The MACD of -1.11 indicates Positive momentum. The RSI at 29.36 is Positive, neither overbought nor oversold. The STOCH value of 14.95 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for MGNI.

Magnite Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
CRTO	73 Outperform	$1.70B	16.43	10.43%	―	-1.22%	112.13%
PERI	67 Neutral	$356.24M	30.36	1.75%	―	-32.95%	-89.11%
PUBM	67 Neutral	$435.78M	38.71	4.36%	―	9.08%	43.58%
TTD	66 Neutral	$26.85B	63.13	15.37%	―	25.63%	118.49%
MGNI	64 Neutral	$1.55B	78.15	3.10%	―	7.82%	―
Sector *	58 Neutral	$26.94B	3.15	-10.67%	4.32%	2.14%	-43.11%
APPS	50 Neutral	$295.07M	―	-101.69%	―	-15.51%	-54.09%

Magnite Corporate Events

Magnite Reduces Loan Interest Rate by 75 Basis Points

On March 18, 2025, Magnite, Inc. announced the successful repricing of its $363 million senior secured term loan facility, reducing the interest rate by 75 basis points to Term SOFR + 3.00%. This adjustment, which follows a previous refinancing in February 2024, results in annual interest savings of over $2.7 million, with no changes to the loan’s maturity or other terms, enhancing Magnite’s financial efficiency.