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Magnite Inc. (MGNI) stock has reached a new 52-week low, dipping to $8.36, as investors navigate a challenging market environment. According to InvestingPro data, technical indicators suggest the stock is in oversold territory, with analysts maintaining price targets ranging from $11 to $25. The advertising technology company, which has seen its shares fluctuate over the past year, is now grappling with a notable 1-year change, showing a decrease of 6.4%. Despite the challenging environment, Magnite maintains strong fundamentals with annual revenue of $668 million and a healthy gross profit margin of 61%. This downturn reflects broader industry trends and investor sentiment, as the market continues to weigh the potential impacts of economic indicators and sector-specific developments on companies like Magnite. The current price level presents a critical juncture for the stock, as market watchers and stakeholders closely monitor its performance for signs of recovery or further decline. InvestingPro analysis indicates the stock is currently undervalued, with 12 additional exclusive insights available to subscribers, including detailed valuation metrics and growth projections.
In other recent news, Magnite reported mixed results for the fourth quarter, with revenue surpassing expectations but earnings falling short. The company posted Q4 revenue of $194 million, exceeding analyst expectations of $184.29 million, marking a 4% year-over-year increase. However, adjusted earnings per share were $0.34, missing the projected $0.38. Contribution ex-TAC, a crucial metric excluding traffic acquisition costs, rose 9% year-over-year to $180.2 million, with significant growth in the Connected TV segment, which increased 23% year-over-year to $77.9 million.
Benchmark analysts maintained their Buy rating on Magnite, raising the price target to $25, citing strong growth prospects in the programmatic Connected TV sector. The analysts noted that despite macroeconomic uncertainties, Magnite's growth trajectory remains robust, particularly in the CTV space. Analyst Dan Kurnos highlighted the company's performance in a recent earnings report, noting a recovery in DV+ weakness and impressive CTV growth, both with and without political advertising revenue. Kurnos also emphasized the potential for strong cash flow and a shift towards a more aggressive capital return policy for shareholders.
Magnite's management projects total Contribution ex-TAC growth above 10% for 2025, with mid-teens growth excluding political advertising. The company also anticipates an adjusted EBITDA margin expansion of at least 100 basis points and high-teens to 20% growth in free cash flow for the year. Despite the earnings miss, Magnite's Q4 Adjusted EBITDA increased 9% year-over-year to $76.5 million, representing a 42% margin, and the company ended 2024 with $483.2 million in cash and cash equivalents.
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