S&P 500   5,088.80
DOW   39,131.53
QQQ   436.78
How this AP photographer captured a unique splash at the swimming worlds with an underwater camera
Laser breakthrough could send stock soaring 2,467% (Ad)
Delays in promised Western military aid to Ukraine are costing lives, the defense minister says
Corruption scandals cast a shadow over Portugal’s early general election and may favor populists
This is the #1 Stock to Buy for the AI Tidal Wave (Ad)
Tax-free status of movie, music and games traded online is on table as WTO nations meet in Abu Dhabi
Caribbean leaders meet with Haiti's prime minister. Foreign force deployment is on the agenda
This is the #1 Stock to Buy for the AI Tidal Wave (Ad)
MILAN FASHION PHOTOS: Feben, Rave Review promote looks for women of all shapes, ages and sizes
AT&T will give $5 to customers hit by cellphone network outage
S&P 500   5,088.80
DOW   39,131.53
QQQ   436.78
How this AP photographer captured a unique splash at the swimming worlds with an underwater camera
Laser breakthrough could send stock soaring 2,467% (Ad)
Delays in promised Western military aid to Ukraine are costing lives, the defense minister says
Corruption scandals cast a shadow over Portugal’s early general election and may favor populists
This is the #1 Stock to Buy for the AI Tidal Wave (Ad)
Tax-free status of movie, music and games traded online is on table as WTO nations meet in Abu Dhabi
Caribbean leaders meet with Haiti's prime minister. Foreign force deployment is on the agenda
This is the #1 Stock to Buy for the AI Tidal Wave (Ad)
MILAN FASHION PHOTOS: Feben, Rave Review promote looks for women of all shapes, ages and sizes
AT&T will give $5 to customers hit by cellphone network outage
S&P 500   5,088.80
DOW   39,131.53
QQQ   436.78
How this AP photographer captured a unique splash at the swimming worlds with an underwater camera
Laser breakthrough could send stock soaring 2,467% (Ad)
Delays in promised Western military aid to Ukraine are costing lives, the defense minister says
Corruption scandals cast a shadow over Portugal’s early general election and may favor populists
This is the #1 Stock to Buy for the AI Tidal Wave (Ad)
Tax-free status of movie, music and games traded online is on table as WTO nations meet in Abu Dhabi
Caribbean leaders meet with Haiti's prime minister. Foreign force deployment is on the agenda
This is the #1 Stock to Buy for the AI Tidal Wave (Ad)
MILAN FASHION PHOTOS: Feben, Rave Review promote looks for women of all shapes, ages and sizes
AT&T will give $5 to customers hit by cellphone network outage
S&P 500   5,088.80
DOW   39,131.53
QQQ   436.78
How this AP photographer captured a unique splash at the swimming worlds with an underwater camera
Laser breakthrough could send stock soaring 2,467% (Ad)
Delays in promised Western military aid to Ukraine are costing lives, the defense minister says
Corruption scandals cast a shadow over Portugal’s early general election and may favor populists
This is the #1 Stock to Buy for the AI Tidal Wave (Ad)
Tax-free status of movie, music and games traded online is on table as WTO nations meet in Abu Dhabi
Caribbean leaders meet with Haiti's prime minister. Foreign force deployment is on the agenda
This is the #1 Stock to Buy for the AI Tidal Wave (Ad)
MILAN FASHION PHOTOS: Feben, Rave Review promote looks for women of all shapes, ages and sizes
AT&T will give $5 to customers hit by cellphone network outage

2 low priced AdTech stocks to ride the advertising rebound

3d rendering with pixelated words Digital Advertising on digital background

Key Points

  • Supply-side platform (SSP) AdTech provider Pubmatic generated a surprise profit in Q3 2023, sending shares higher by 23%.
  • Magnite is the largest independent SSP, reporting 2.9% YoY revenue growth in its Q3 2023.
  • CTV and ad-supported channels and tiers are the secular tailwinds for AdTech providers.
  • 5 stocks we like better than PubMatic

Advertising technology (AdTech) is driven by programmatic advertising platforms in the Business Services sector. These platforms enable advertisers to use automation and algorithmic programming to bid for ad inventory through numerous networks on a demand-side platform (DSP). Sell-side platforms (SSP) allow content creators and publishers to maximize their digital ad inventory, connecting them to vast advertiser networks to sell their ad space. The growth of connected TV (CTV) devices and ad-supported streaming networks is a secular tailwind for programmatic advertising platforms. Here are two SSP operators that are priced cheap and didn't lower their forward guidance.

The rebound of digital advertising is on.

Digital advertising has bottomed out and is rebounding. This is evidenced by major social media platforms like Alphabet Inc. NASDAQ: GOOGL and Meta Platforms Inc. NASDAQ: META. Google saw advertising revenues climb 9.4% YoY, and YouTube ad revenues jumped 11.3% in its latest quarter. The leading DSP is operated by Trade Desk Inc. NYSE: TTD, which saw a 25% YoY jump in Q3 2023 revenues but provided soft Q4 2023 guidance, causing its shares to collapse by 30%. SSPs and behemoths like Google Ad Manager and Amazon.com Inc. NASDAQ: AMZN publisher services compete.

Pubmatic Inc. NASDAQ: PUBM  

Leading independent SSP PubMatic's cloud infrastructure platform connects publishers and app developers with an expansive network of advertisers. It enables digital content creators like apps, video games, CTV and websites to sell ad space more effectively using real-time bidding auctions.


For publishers, it provides sophisticated analytics and automation to help control revenue opportunities and user experience across channels, including CTV, online video, mobile app, web and beyond. For buyers, its SSP brings premium inventory and transparency to buyers to help drive ROI. The platform helps buyers enhance how inventory and data are packaged and transacted with efficient, ROI-driven data targeting on the sell side.

Surprise profits

On November 8, 2023, Pubmatic reported its Q3 2023 earnings for the quarter ending September 2023. The company reported GAAP EPS of 3 cents, beating consensus analyst estimates for a loss of 8 cents by 11 cents. GAAP income was $1.3 million and non-GAAP income was $7.6 million. Revenues fell 1.3% YoY to $63.68 million versus $59.46 million consensus analyst estimates. Net dollar-based retention was 97%. CTV revenues rose 5% sequentially. Pubmatic closed the quarter with $171.4 million in cash and cash equivalents.

Upside guidance

Pubmatic provided upside revenue guidance for Q4 2023. The company expects revenues between $76 million to $80 million versus $74.3 million consensus analyst estimates. Check out the sector heatmap on MarketBeat.

CEO Insights

Pubmatic CEO Rajeev Goel noted that Supply Path Optimization (SPO) deals grew to an all-time high of 45%, aided by the launch of Activate. The company added new logos, expanded offerings and strengthened publisher and buyer relationships. He stated that as the industry matures, there is an ongoing imperative for greater control over the digital ad supply chain, which can improve efficiency across the ecosystem. These are tailwinds for Pubmatic as publishers and buyers have to reconstruct their supply chains, making Pubmatic a key technology partner.

He concluded, "…The role of sell-side technology and, in particular PubMatic has never been more compelling as publishers look for unbiased technology partnerships to help them drive growth and buyers seek to simplify their technology stacks to become more efficient and to navigate privacy changes. As a result, we are seeing increased interest and adoption of our technology across our product suite."

Pubmatic analyst ratings and price targets are at MarketBeat. Pubmatic peers and competitor stocks can be found with the MarketBeat stock screener.

pubm stock chart daily gap-fill attempt

Daily gap-fill attempt

The daily candlestick chart on PUBM illustrates a gap-fill attempt at $16.93 and a secondary gap-fill level at $18.17. The daily market structure low (MSL) breakout triggered above $11.90. PUBM skyrocketed on its Q3 2023 earnings report, gapping to $13.67 and climbing as high as $16.13. The daily relative strength index (RSI) has traveled into overbought territory as it hovers around the 76-band. Pullback support areas are $14.73, $13.67, $11.90 and $10.92.

Magnite Inc. NASDAQ: MGNI

Magnite is another leading independent SSP helping publishers better monetize their digital advertising inventory. The platform offers real-time bidding, analytics and measuring and reporting functions. Magnite plays the middleman between publishers, ad agencies, advertisers and DSPs. Magnite is the largest independent SSP due to its history of acquisitions, which has the potential to overleverage its balance sheet.

Its CTV platform, Magnite Streaming, specifically accommodates the CTV market. The recovery of digital ad spend should drive shares higher as its CTV revenues rose over 20% YoY. Its digital video plus, or DTV+, is a unified cross-platform solution enabling advertisers to manage and execute ad campaigns across multiple channels, including video, audio, display and CTV.

Back in growth mode

On November 8, 2023, Magnite reported Q3 2023 earnings of 12 cents, beating analyst estimates by 1 cent. Revenues grew 2.9% YoY to $150.09 million versus $129.91 consensus analyst estimates. Contribution excluding traffic acquisition costs (ex-TAC) was up 4% YoY to $133.1 million.

In-line guidance

The company expects total contribution ex-TAC for Q4 2023 to be between $158 million to $162 million. Magnite expects double-digit percentage growth of adjusted EBITDA for 2024 and an even higher growth rate for cash. It's targeting adjusted EBITDA margin expansion of 50 to 100 bps.

Magnite CEO Michael Barrett commented, "We had some noteworthy customer wins this quarter, announcing that we'd be powering the Disney+ biddable marketplace via Magnite streaming as well as an expansion in our partnership with Paramount advertising. Buyers now have access to Paramount's combined streaming offerings, including their IQ program through Magnite."

Magnite analyst ratings and price targets are at MarketBeat.

mgni stock chart daily gap-fill attempt

Daily gap-fill attempt

The daily candlestick chart on MGNI also shows a gap between the $10.01 and $12.22 price levels. This gap was formed on its previous Q2 2022 earnings miss and subsequent price gap down. The daily MSL trigger breakout formed on the $7.51 trigger. The daily RSI is rising at the 60-band. The daily 200-period moving average resistance sits at $10.24. Pullback support levels are at $7.51, $6.82, $6.28 and $5.59.

→ Investing Wizard Who Turned $37K Into $2.7M in Just 4 Years Makes His Next Big Move (From The Oxford Club) (Ad)

Should you invest $1,000 in PubMatic right now?

Before you consider PubMatic, you'll want to hear this.

MarketBeat keeps track of Wall Street's top-rated and best performing research analysts and the stocks they recommend to their clients on a daily basis. MarketBeat has identified the five stocks that top analysts are quietly whispering to their clients to buy now before the broader market catches on... and PubMatic wasn't on the list.

While PubMatic currently has a "Moderate Buy" rating among analysts, top-rated analysts believe these five stocks are better buys.

View The Five Stocks Here

The 10 Best AI Stocks to Own in 2024 Cover

Wondering where to start (or end) with AI stocks? These 10 simple stocks can help investors build long-term wealth as artificial intelligence continues to grow into the future.

Get This Free Report

Companies Mentioned in This Article

CompanyMarketRank™Current PricePrice ChangeDividend YieldP/E RatioConsensus RatingConsensus Price Target
PubMatic (PUBM)
2.3086 of 5 stars
$16.36+1.9%N/A545.33Moderate Buy$18.00
Magnite (MGNI)
2.4017 of 5 stars
$9.39+0.6%N/A-5.62Moderate Buy$13.44
Alphabet (GOOGL)
2.5967 of 5 stars
$143.96-0.1%N/A24.82Moderate Buy$153.65
Meta Platforms (META)
4.0387 of 5 stars
$484.03-0.4%0.41%32.49Moderate Buy$494.53
Trade Desk (TTD)
3.3145 of 5 stars
$81.44-2.5%N/A226.23Moderate Buy$88.93
Amazon.com (AMZN)
4.8751 of 5 stars
$174.99+0.2%N/A60.34Buy$197.95
Compare These Stocks  Add These Stocks to My Watchlist 

Jea Yu

About Jea Yu

  • JeaYu21@gmail.com

Contributing Author

Trading Strategies

Experience

Jea Yu has been a contributing writer for MarketBeat since 2018.

Areas of Expertise

Equities, options, ETFs and futures; fundamental, qualitative, quantitative and technical analysis and pattern identification; active and swing trading; trading systems and methodology development

Education

Bachelor of Arts, University of Maryland, College Park

Past Experience

U.S. equity markets trader, writer and analyst for over 25 years. Published four books by publishers McGraw-Hill, John Wiley & Sons, Marketplace Books and Bloomberg Press. Speaker at various expos and seminars and has been quoted and featured in USA Today, The Wall Street Journal, Traders Magazine, The Financial Times and various trade publications, including Stocks & Commodities, Active Trader and Online Investor.


Featured Articles and Offers

7 Speculative Stocks that Could be Worth the Risk

7 Speculative Stocks that Could be Worth the Risk

Explore 7 speculative stocks with high-risk, high-reward potential in this video. From biotech to AI, uncover the future of investing.

Search Headlines: