Magnite Inc. (MGNI) is an independent sell-side advertising platform that combines Rubicon Project's programmatic expertise with Telaria's leadership in CTV. The company provides a technology solution to automate the purchase and sale of digital advertising inventory.
The company is considered the largest independent ad platform for video content producers looking to monetize their work. MGNI should continue to benefit from the growth of online video. However, branded advertising could see some disruption from supply chain challenges.
The company has a current ratio of 1.2, indicating it has more than enough liquidity to handle short-term liquidity. Sales have grown an average of 40.5% per year over the past three years. Analysts expect revenue to rise 89.8% for the year.
The stock looks overvalued with a trailing P/E of 112.74 and a forward P/E of 34.60. MGNI was showing bearish momentum from February to May, but performance has been mixed since. This is evident in the chart below.
Take a look at the 1-year chart of MGNI below with added notations:
MGNI has formed a major level of support at $24 (green) over the past year. The stock has repeatedly rallied off that $24 mark, but it may now be on its way back down to that level again.
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If MGNI were to break support, lower prices will likely follow from there. A trader could enter a short position if the stock were to break $24 with a protective stop placed above the entry level.
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MGNI shares were trading at $26.28 per share on Wednesday morning, up $0.08 (+0.31%). Year-to-date, MGNI has declined -14.43%, versus a 23.10% rise in the benchmark S&P 500 index during the same period.
About the Author: Christian Tharp
I am an expert stock market coach having helped over 4000 beginner and advanced traders & investors from around the world take control of their financial futures. I also write stock market related articles for the Adam Mesh Trading Group and Yolo Publishing.
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