On Tuesday, Evercore ISI updated its outlook on Magnite (NASDAQ:MGNI), raising the stock's price target to $20.00 from $17.00 and maintaining an Outperform rating. The upgrade comes amid impressive market performance, with InvestingPro data showing the stock has delivered nearly 100% returns over the past year and is trading near its 52-week high of $18.38.
The firm's updated stance comes after investor meetings in San Francisco on Monday, where Magnite's Senior Vice President of Platform Revenue, Mike Laband, and Investor Relations Officers Nick Kormeluk and Mike Beckstead presented.
The meetings reportedly left a positive impression, with Evercore ISI highlighting Magnite's solid positioning in the face of market tailwinds. These include robust growth in Connected TV (CTV) and rising demand from live sports and the mid-market sector.
Company-specific catalysts such as Netflix (NASDAQ:NFLX)'s advertising expansion and the potential favorable resolution of the Department of Justice's antitrust lawsuit against Google (NASDAQ:GOOGL)'s advertising technology business were also noted as factors reinforcing Magnite's outlook.
According to InvestingPro analysis, the company maintains healthy financials with a current ratio of 1.11 and operates with moderate debt levels.
Evercore ISI's price target adjustment is based on a 12X EV/EBITDA multiple applied to their Fiscal Year 2026 EBITDA estimate of $262 million for Magnite. The firm's commentary suggests confidence in Magnite's ability to capitalize on the current market dynamics and its strategic initiatives.
The positive sentiment from Evercore ISI reflects broader investor interest in companies that are positioned to benefit from the ongoing shifts in advertising, particularly in the CTV space and the digital advertising market at large. Magnite's strategic moves and potential industry developments seem to provide a backdrop for the firm's favorable view and price target increase.
In other recent news, Magnite, a major player in the advertising technology sector, has been experiencing significant growth. Its Q3 2024 earnings call reported an 8% year-over-year increase in revenue, reaching $162 million with a net income of $5.2 million. This is a substantial recovery from the net loss of $17.5 million in Q3 2023. Adjusted EBITDA also grew by 26% to $51 million.
The brokerage firm, Needham, has maintained a Buy rating for Magnite and raised its price target to $20.00, up from the previous $17.00. This adjustment comes in anticipation of a scheduled event where Magnite's top executives will engage with Needham's clients.
Key growth drivers for Magnite include opportunities in live sports broadcasting, partnerships with Netflix, the expansion of Audio Ads, growth in international markets, and strategic cost-cutting initiatives. In terms of future outlook, Magnite anticipates continued growth in Q4, with a contribution ex-TAC forecasted between $182 million and $186 million.
The company also raised full-year growth expectations for contribution ex-TAC to 11-12% and expects to be GAAP net income positive for the full year.
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