Magnite ( MGNI Quick Quote MGNI - Free Report) recently announced that it is adding the Nth Party’s team of seven employees, which includes five engineers, to its employee base. The addition of Nth Party team is expected to boost Magnite’s ability to build identity and audience solutions for sellers and buyers. Nth Party develops cryptographic software for secure audience data sharing and analysis. Considering the growing importance of first-party audience data in the advertising space, the addition of Nth Party employees will help Magnite accelerate its data activation efforts instantly. Magnite believes that first-party publisher data collected in a privacy-compliant manner will be the future of identity solutions. First-party publisher data, which is much more accurate than third-party data, refers to the information collected by publishers about their sites’ visitors. This data can include behaviors, actions or interests demonstrated across their sites. First-party data provided by publishers is considered the most valuable data by advertisers. Supply side platforms (SSPs) like Magnite are a driving force behind the ongoing transition from third-party based to first-party data. The addition of Nth Party’s team further strengthens Magnite’s capabilities in this respect. Connected Television Footprint Drives Prospects
Magnite is riding on continued strong recovery in the digital advertising market. A strong product portfolio, thanks to Unified Decisioning products and the Demand Manager offering, as well as steady traction in targeted advertising, is driving top-line growth.
Steady momentum across all formats and device types, which include Connected Television (“CTV”), mobile, non-CTV video and display, drives prospects. Acquisitions, SpotX and SpringServe have expanded Magnite’s addressable market. The addition of SpringServe is helping Magnite capture and gain share in CTV due to the addition of a strategic ad server. Magnite is anticipated to have benefited from increased cord cutting and growing traction of ad-supported programmatic CTV, led by a shift from direct sales to programmatic ad-spending. Healthy demand for the company’s CTV addressability capabilities — that offer data-driven audience-targeting capabilities to advertisers — is expected to have driven the top line. In third-quarter 2021, Magnite’s CTV revenues, excluding TAC, jumped 51% year over year to $43.1 million. CTV represented 38% of revenues, ex TAC, and now represents the largest portion of Magnite’s business. Magnite’s expanding customer base has been a growth driver. fuboTV ( FUBO Quick Quote FUBO - Free Report) and Quigley Simpson selected Magnite as their preferred SSP. CTV is fuboTV's most popular streaming platform. As fuboTV’s preferred SSP, Magnite facilitates access to fuboTV’s highly sought-after CTV inventory, including 50,000 live sports events per year as well as more than 100 premium sports, news, and entertainment channels for the entire household. However, Magnite is expected to have suffered from supply-chain-related ad cancellations and tough year-over-year comparisons in the fourth quarter of 2021. Continued weakness in political, automotive, hobbies, travel, and food and beverage end-markets is expected to have hindered top-line growth in the fourth quarter. Zacks Rank & Stocks to Consider
Magnite currently has a Zacks Rank #4 (Sell).
Magnite shares are down 38.7% in the past year, underperforming the Zacks Internet Software industry’s decline of 26.9%. The Zacks Consensus Estimate for 2022 is pegged at 82 cents per share, down by a penny over the past 60 days. Arlo Technologies ( ARLO Quick Quote ARLO - Free Report) and Cloudflare ( NET Quick Quote NET - Free Report) are better-ranked stocks in the same industry. Both carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here. Arlo shares are up 21.2% in the past year. The Zacks Consensus Estimate for 2022 is pegged at 1 cent per share, up from a loss of 3 cents over the past 60 days. Cloudflare shares are up 34.1% in the past year. The consensus mark for 2022 is pegged at 1 cent per share, unchanged over the past 60 days.