MAGNITE, INC. (MGNI): what the price assumes

Generated: 2026-07-29 · Exported: 2026-08-01 · Source: https://boothcheck.com/report/MGNI

Headline

Field	Value
Ticker	MGNI
Company	MAGNITE, INC.
Current price	$19.79/sh
Composition	CTV 48% / Mobile 37% / Desktop 15%

What The Price Assumes (Inversion)

The assumption today's price embeds, recovered by inverting the valuation.

Field	Value
Inversion basis	whole-company
Operating margin (value-band context)	13.2%
Operating margin today	14.8%
Margin compression (value-band)	-1.6pp
Must persist for	16.3y
Multiple paid	29x operating income

The operating-margin figure is value-band context at year 8: derived from the framework's value band, a separate calculation — not part of the priced-in solve.

Solve inputs: computed at a 14.3% cost of capital; growth searched up to the 25% self-funding ceiling; each 1pp moves the implied horizon ~2.7 years.

Reconcile: at the x-ray's 9.3% required return this reads ~5.8 years; the models below use their own rates.

How unusual the bet is: elevated

Reference	Value
cohort percentile (of 190 peers)	53
sustained it ~10 years at this level	15%
implied end-window share	0%

Valuation X-Ray

The price is justified by relative-multiple; earnings-power land below the price.

How the valuation models price the stock relative to the market price. Price/FV above 1.0 means the market pays more than that lens defends (expensive); at or below 1.0 the lens can defend the price.

Family	Median price/FV	Models	Reads
Asset	1.42x	4	expensive
Earnings	1.74x	3	expensive
Relative	0.58x	5	justifies
Growth	1.30x	3	expensive

Families that justify the price: Relative Families that call it expensive: Earnings

The models below discount at their own flat-beta convention rates (cost of equity 9.3%, WACC 8.2%); the inversion above states its own rate.

Per-Model Detail (n=15)

Model	Family	FV	Price/FV	Applicable	Methodology
DCF Perpetual Growth	Growth	$6.70	2.95x	yes	FCF base $0.0B, growth 7% (input: historical growth), terminal g 4.0%, WACC 8.2%, 5yr projection
DCF Exit Multiple	Growth	$17.22	1.15x	yes	Exit EV/EBITDA: 17.4x / 19.4x / 21.4x (bear / base = today's held flat / bull), 5yr
Relative Valuation	Relative	$33.85	0.58x	yes	P/E 35x (static sector reference · 2026-04), scenarios: 29.3x / 35.0x / 40.7x (bear / base = reference held flat / bull), EV/EBITDA 25x
Simple DDM	Growth	—	—	no	—
Two-Stage DDM	Growth	—	—	no	—
Simple Excess Return	Asset	$11.98	1.65x	yes	BV/sh $6.41, ROE (TTM) 17.3%, ke 9.3%
Two-Stage Excess Return	Asset	$16.16	1.22x	yes	5yr excess ROE then converge to ke=9.3%
Discounted Future Market Cap	Growth	$15.20	1.30x	yes	Rev $0.7B, growth 7% (input: historical growth; tapered), Terminal P/S: 3.3x / 3.9x / 4.6x (bear / base = today's held flat / bull, cap 8x)
Peter Lynch Fair Value	Relative	$12.60	1.57x	yes	EPS $1.05, growth 2% (input: historical EPS growth), PEG=8.93 (Overvalued)
Margin Trajectory	Growth	—	—	no	—
Earnings Power Value	Earnings	—	—	no	—
Residual Income	Asset	$16.20	1.22x	yes	BV $6.41 + 5yr PV of (ROE (TTM) 17.3% − Kₑ 9.3%) × BV; BV grows 8.8%/yr
Graham Number	Asset	$12.31	1.61x	yes	√(22.5 × EPS $1.05 × BVPS $6.41) — Graham's conservative floor
EV/EBITDA Relative	Relative	$26.04	0.76x	yes	EBITDA $0.16B × sector EV/EBITDA 25.0x
FCF Yield	Earnings	$1.83	10.81x	yes	FCF $47.3M / Kₑ 9.3% — zero-growth perpetuity
SBC-Adj FCF Yield	Earnings	—	—	no	—
Ben Graham Formula	Earnings	$33.88	0.58x	yes	EPS $1.05 × (8.5 + 2×15.0%) × (4.4 / 5.3%)
ROIC-Justified P/B	Asset	$0.41	48.27x	yes	BV $6.41 × (ROIC 0.5% / WACC 8.2%) (excluded from median)
P/Sales Sector	Relative	$40.36	0.49x	yes	Revenue $0.72B × sector P/S 8.0x
PEG Fair Value	Relative	$39.38	0.50x	yes	EPS $1.05 × (PEG 1.5 × growth 25.0% (input: historical EPS growth)) → PE 37.5x
Earnings Yield	Earnings	$11.35	1.74x	yes	EPS $1.05 / required return 9.3% (Rf 4.3% + ERP 5.0%)
Funds From Operations Multiple	Relative	—	—	no	—
Clinical Phase NPV	Growth	—	—	no	—
Merton	Asset	—	—	no	—
V5 Mechanical	—	—	—	no	—

Solvency

Field	Value
Net debt	$174.9m
Net debt / NOPAT (after-tax)	2.08x
Net debt / operating income (pre-tax)	1.64x
Interest coverage	3.5x
Share count CAGR (dilution)	2.9%
Burning cash	no

Bullet Takeaways

Magnite is the largest independent sell-side advertising platform, the technology that streaming services and publishers use to sell their ad inventory programmatically. The pivot to connected TV has worked: in Q1 2026, CTV crossed 50% of revenue for the first time, up from 43% a year earlier, with CTV contribution ex-TAC growing 30%.

The company turned profitable. Q1 revenue rose 6% to $164.4 million, contribution ex-TAC rose 10%, and Magnite swung to net income of $4.4 million from a loss, with adjusted EBITDA margin of 27%.

At about $18 the price reads as elevated and is justified mainly by the relative-multiple frame, while the earnings-power frames say expensive. Management is reinvesting and buying back stock, and reaffirmed full-year 2026 guidance for at least 11% contribution ex-TAC growth and an EBITDA margin above 35%.

Bull Case

Look at how Magnite is deploying capital and the story is one of a business funding its own transition and returning the surplus. The company is reinvesting in the connected-TV platform that now drives more than half its revenue, guiding to roughly $60 million of capital expenditure for 2026, while simultaneously buying back stock: it repurchased about 4.6 million shares for $63 million under its current authorization, including 1.56 million shares for $25.5 million in a recent four-month window. A company that can fund a strategic pivot and retire shares at the same time is generating real cash, and the swing to profitability confirms it: Q1 2026 net income of $4.4 million reversed a $9.6 million loss a year earlier, on an adjusted EBITDA margin of 27%.

The CTV transition is the value-creating bet, and it is paying off on schedule. CTV contribution ex-TAC grew 30% year over year to $82.3 million and crossed 50% of total revenue for the first time, up from 43%. Magnite sits on the sell side for a who's who of streaming inventory, with exposure across Netflix, Roku, Disney, NBC, Paramount, Fox, and Warner, and benefits from Amazon's demand-side push routing spend through independent supply. As linear TV dollars keep migrating to streaming, the platform that aggregates and optimizes that inventory captures a structural tailwind, and Magnite is the largest independent option, which matters to publishers wary of routing through a walled-garden competitor.

The guidance and the multiple leave room if execution holds. Management reaffirmed at least 11% contribution ex-TAC growth and mid-teens adjusted EBITDA growth for 2026, and raised the EBITDA margin target to at least 35.5%, so the profitability is expanding, not just appearing. The relative-multiple frames value the business well above the price (relative valuation near $29, EV/EBITDA relative near $25, P/Sales near $39), and analysts carry Buy ratings with targets ranging from the high teens to $30 (Benchmark at $30, calling it a top idea). The bull case is a newly-profitable CTV leader, reinvesting and buying back stock, riding the streaming-ad migration with a widening margin.

Bear Case

The bear case is a sector-cycle and concentration argument. Programmatic advertising is cyclical: ad budgets, especially the brand and CTV dollars Magnite increasingly depends on, expand and contract with the broader economy, and a slowdown in advertiser spending flows straight through a platform that takes a cut of transaction volume. The current results reflect a healthy ad market and a strong CTV migration; they are closer to a cyclical and secular high than a sustainable baseline, and a buyer paying an elevated multiple is extrapolating peak conditions forward. The 10-K is explicit about the structural fragility underneath: "the number of large media buyers and sellers in the market is finite, and it could be difficult for us to replace the losses from any buyers or sellers whose" business it loses. That is customer concentration in plain language, and with CTV now over half the business, the dependence on a handful of large streaming partners like Netflix and Disney is the single biggest risk to the revenue line.

The competitive and technological pressures compound the cycle risk. Magnite operates between giant demand-side platforms and giant media owners, both of which have incentive to disintermediate the independent middle. The filing also flags the erosion of the targeting tools the industry was built on, noting that "the use of third-party cookies and other tracking technologies that collect user information" has been curtailed, which pressures the desktop and mobile side of the business even as CTV grows. If a major streaming partner brings ad-tech in-house or routes more volume to a walled garden, Magnite loses a concentrated chunk of revenue it cannot easily replace.

The valuation does not reward that risk. The implied duration is about 22 years, meaning the price requires more than two decades of compounding to justify. The relative frames reach the price only by comparing Magnite to other software multiples, which is generous for a transaction-fee business with concentrated customers and cyclical demand. The bear conclusion is that at an elevated multiple on peak ad conditions, with a finite and concentrated customer base and structural disintermediation risk, the downside if the CTV cycle or a key partner turns is large.

Valuation

Magnite is valued as an elevated growth name, justified mainly by the relative-multiple frame while the earnings-power frames say expensive. The dispersion is wide and informative. The blended X-ray lands near $14, below the roughly $18 price.

That very low inversion band deserves a caveat: the operating-income basis the inversion prices is noisy here (the record and EDGAR operating-income figures diverge by more than a third), so the band is anchored to a conservative profit number and should be read as directional. The cleaner takeaway is the pattern: the relative-multiple frames credit Magnite with a software-like multiple on its growing CTV revenue, while the cash-flow and earnings-power frames, which capitalize what the business actually nets after costs, say it is expensive.

The practical read: Magnite is priced as a CTV growth story, and the case for the price rests entirely on that story continuing, at least 11% contribution growth, an expanding margin above 35%, and the streaming-ad migration staying intact. The relative frames near $25 to $39 are the bull anchor; the cash-flow and inversion frames in the low single digits to low teens are the bear anchor. For a buyer, the valuation is a bet that the CTV transition keeps compounding and the customer concentration does not bite. The sensitivity is moderate, and the reliability of the solve is rated ok.

Catalysts

Q1 2026 (reported May 6) was the profitability inflection. Revenue rose 6% to $164.4 million, contribution ex-TAC rose 10% to $160.9 million (high end of guidance), and Magnite swung to net income of $4.4 million from a $9.6 million loss a year earlier, with adjusted EBITDA of $42.9 million at a 27% margin. The headline was CTV crossing 50% of revenue for the first time (up from 43%), with CTV contribution ex-TAC up 30% to $82.3 million.

Management reaffirmed full-year 2026 guidance for at least 11% contribution ex-TAC growth and mid-teens adjusted EBITDA growth, raised the EBITDA margin target to at least 35.5%, and held capital expenditure at about $60 million. The company continues to buy back stock (about 4.6 million shares for $63 million under the current authorization).

The growth catalyst is the streaming-ad migration and Magnite's position as the largest independent sell-side platform, with inventory exposure across Netflix, Roku, Disney, NBC, Paramount, Fox, and Warner, plus Amazon demand-side routing.

Analyst sentiment is constructive: Buy ratings with targets from the high teens to $30 (Benchmark at $30). The swing factors are CTV growth and ad-market health, concentration risk among a few large streaming partners, competitive disintermediation by demand-side platforms and walled gardens, and continued margin expansion against the reaffirmed guidance.

Peer Cohorts (Per Segment, With Filing Citations)

Magnite (single segment) (reported)

• DV (DoubleVerify Holdings, Inc.)
• FY2025 10-K: …​ $ 122,775 Cash acquired ​ ​ ( 1,705 ) Purchase consideration, net of cash acquired ​ $ 121,070 ​ The acquired intangible assets of Scibids will be amortized over their estimated useful lives. Accordingly, customer relationships will be amortized over ten years and developed technology will be amortized over four…
• FY2025 10-K: …Magnite, Teads, Epsilon, Nexxen, Taboola, Criteo ● Ad Servers and Ratings/Workflow Platforms : Innovid, Google, MediaOcean Prisma, Amazon and Microsoft ● Social Platforms : Facebook, Instagram, YouTube, TikTok, X (formerly Twitter), Snapchat, and Pinterest ● CTV : Amazon, Netflix, Disney+, Hulu and Roku Our…
• RAMP (LiveRamp Holdings, Inc.)
• FY2025 10-K: …us-gaap:RestrictedStockUnitsRSUMember ramp:PerformanceStockMember 2024-04-01 2025-03-31 0000733269 ramp:OperatingMetricsPerformancePlanMember us-gaap:RestrictedStockUnitsRSUMember ramp:PerformanceSharesVestingTotalShareholderReturnMember srt:MinimumMember 2024-04-01 2025-03-31 0000733269…
• FY2025 10-K: $ - $ - $ 25,402 Level 1: Money market funds 387,929 - - 387,929 Assets of non-qualified retirement plan - - 15,913 15,913 Certificates of deposit - 7,500 - 7,500 Equity securities - - 446 446 Total $ 413,331 $ 7,500 $ 16,359 $ 437,190 March 31, 2024 Cash and Cash Equivalents Short-Term Investments Other Current…
• TTD (TRADE DESK, INC.)
• FY2025 10-K: Inc. and Vivek Kundra. 10-Q 5/8/2025 10.3 10.18(a)+ The Trade Desk, Inc. 2 025 Incentive Award Plan . 10-Q 8/7/2025 10.1 10.18(b)+ Form of Stock Option Agreement under The Trade Desk, Inc. 2025 Incentive Award Plan. X 10.18(c)+ Form of Restricted Stock Award Agreement under The Trade Desk, Inc. 20 25 Incentive Award…
• FY2025 10-K: …0001671933 2025 FY false .500 http://xbrl.sec.gov/stpr/2025#CA http://xbrl.sec.gov/stpr/2025#IL http://xbrl.sec.gov/stpr/2025#NY http://xbrl.sec.gov/stpr/2025#IL http://xbrl.sec.gov/stpr/2025#NY http://xbrl.sec.gov/stpr/2025#IL http://xbrl.sec.gov/stpr/2025#NY http://fasb.org/srt/2025#ChiefExecutiveOfficerMember…
• APP (AppLovin Corp)
• FY2025 10-K: …shown in the Consolidated Financial Statements or Notes thereto. (3) Exhibits: The documents listed below are incorporated by reference or are filed with this report, in each case as indicated therein. EXHIBIT INDEX Information Incorporated by Reference Exhibit Number Exhibit Title Form File No. Exhibit Filing Date…
• FY2025 10-K: $ 1.0 billion in aggregate principal amount of 5.125 % notes due December 1, 2029 (the "2029 Notes"), $ 1.0 billion in aggregate principal amount of 5.375 % notes due December 1, 2031 (the "2031 Notes"), $ 1.0 billion in aggregate principal amount of 5.500 % notes due December 1, 2034 (the "2034 Notes"), and $ 550.0…

Methodology Note

• Priced-in inversion: the valuation is inverted on the current price to recover the operating-income growth, duration, and steady-state margin the price embeds (ROE for financials, FFO growth for REITs).
• Valuation x-ray: the valuation models, grouped into four families (asset, earnings, relative, growth). Each model is expressed as a price/FV ratio (distance from price), not a point fair-value estimate. The spread across families is the disagreement.
• Solvency: net cash/debt, net-debt-to-NOPAT, interest coverage, and share-count CAGR from EDGAR financials (net debt / FFO and fixed-charge coverage for REITs; regulatory-capital framing for financials).
• Peer cohorts: per-segment comparables with deep-linkable SEC filing citations.

Fundamentals sourced from SEC EDGAR filings. Current price from Databento. The priced-in inversion and valuation x-ray are computed by the boothcheck engine; narrative composed by AI from the structured data.