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Investing.com - Jefferies has reduced its price target on PubMatic Inc (NASDAQ:PUBM) to $10.00 from $12.00 while maintaining a Hold rating on the advertising technology company’s stock. The stock, currently trading at $10.57, has declined over 38% in the past six months, though InvestingPro analysis suggests the company remains financially robust with more cash than debt on its balance sheet.
The price target adjustment follows PubMatic’s lower-than-expected third-quarter revenue guidance, which prompted Jefferies to revise its financial estimates for the company.
Jefferies now forecasts a 7% revenue decline for PubMatic in fiscal year 2025, contrasting with the 9% growth expected in fiscal year 2024, along with an adjusted EBITDA margin of 18% compared to 32% in the current fiscal year.
For fiscal year 2026, Jefferies has lowered its revenue estimate by 9% and adjusted EBITDA projection by 25%, anticipating continued weakness in the first half of 2026 followed by a gradual recovery in the second half as PubMatic laps a DSP change.
The new $10 price target implies a multiple of 6.5 times Jefferies’ fiscal year 2026 adjusted EBITDA estimate for PubMatic.
In other recent news, PubMatic Inc. reported its second-quarter 2025 earnings, highlighting a significant revenue increase. The company achieved $71.1 million in revenue, surpassing the forecasted $67.84 million, which represents a 4.81% surprise. Despite this positive revenue performance, PubMatic’s earnings per share (EPS) fell short, recording $0.05 against an expected -$0.16. This resulted in a -131.25% surprise in EPS. Following the earnings announcement, B. Riley downgraded PubMatic from Buy to Neutral, adjusting its price target from $17.00 to $9.00. The downgrade was attributed to issues with DSP partners, despite the company’s strong quarterly results. Additionally, PubMatic’s shares experienced a decline in after-hours trading due to disappointing third-quarter guidance. These recent developments have drawn attention from investors and analysts alike.
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