On Wednesday, Benchmark analysts maintained their Buy rating on Magnite shares (NASDAQ:MGNI), with a steady price target of $21.00, representing potential upside from the current price of $16.62.
According to InvestingPro data, the stock has shown remarkable momentum with a 77% return over the past year. The firm highlighted Magnite's significant progress in 2024, citing key developments such as the partnership with Netflix (NASDAQ:NFLX) in May, a two-year contract renewal with Disney (NYSE:DIS) in October, and growth opportunities through collaborations with Roku (NASDAQ:ROKU) and United.
Magnite is now entering a crucial year of execution in the open programmatic Connected TV (CTV) landscape. Despite challenging comparisons with the first quarter's CTV ex-TAC (Traffic Acquisition Costs) and a strong political advertising landscape in the second half of 2025, Benchmark analysts anticipate that Magnite could surpass consensus expectations.
The company's revenue growth of 8.7% in the last twelve months and gross profit margin of 60.5% support this optimistic outlook. The forecasted acceleration of CTV ex-TAC revenue growth from low-teens to high-teens is a testament to Magnite's recent wins and the overall improvement in CTV market trends, with more stable pricing and inventory.
Analysts also consider the partnership between FUBO and Disney (DIS) a positive development for Magnite, potentially increasing volume and marking a significant move into programmatically saleable live sports inventory, as demonstrated by the Olympics.
Despite Magnite's performance in the previous year, its shares are currently valued at approximately 12 times the estimated 2025 EBITDA. InvestingPro analysis indicates the company maintains a "Good" financial health score, with liquid assets exceeding short-term obligations. The company is expected to improve its financial position, transitioning to a net cash situation and possibly initiating capital returns within the next 12 to 18 months.
Benchmark views the risk/reward profile as more balanced but still sees potential for Magnite's stock to appreciate, continuing to recommend it as one of their top picks. For deeper insights into Magnite's valuation and growth prospects, investors can access the comprehensive Pro Research Report, available exclusively on InvestingPro.
In other recent news, Magnite, Inc. has reported robust growth in its Q3 2024 earnings, with an 8% year-over-year increase in revenue, reaching $162 million, and a net income of $5.2 million. This is a significant recovery from a net loss of $17.5 million in Q3 2023. Moreover, the company's adjusted EBITDA expanded by 26% to reach $51 million.
Analyst firms Evercore ISI and Needham have both upgraded Magnite's stock price target to $20.00, maintaining an Outperform and a Buy rating respectively. This comes as the company continues to demonstrate strong market performance and strategic initiatives, including partnerships with Netflix, opportunities in live sports broadcasting, and expansion of Audio Ads.
Among other recent developments, Magnite has extended its partnership with Disney for two years, incorporating live sports and additional regions. The company also anticipates continued growth in Q4, expecting a contribution ex-TAC ranging between $182 million and $186 million. For the full year, Magnite has raised its growth expectations for contribution ex-TAC to 11-12% and plans to be GAAP net income positive.
In a strategic move, the company has also announced the appointment of two new presidents, Sean Buckley as President, Revenue, and Katie Evans as President, Operations. This change is part of the company's efforts to strengthen its executive team and advance its operational and revenue-generating capabilities.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.