Why Magnite Shares Are Tumbling Today

Magnite Inc MGNI shares are trading lower by around 35% following Q2 FY23 results. Several analysts reduced the price target.

Yesterday, MGNI reported Q2 adjusted EPS of $0.09, beating the $0.03 estimate and sales of $152.50 million, exceeding the consensus of $134.28 million. 

For Q3, the company expects the contribution ex-TAC of $128 million-$132 million. 

For FY23, the company now expects contribution ex-TAC to grow in mid-to-high single-digits (vs. high single-digits expected earlier). 

Stephens & Co. reduced the price target to $14 from $17 maintaining an Overweight rating.

Analyst Nicholas Zangler lowered the estimates for FY23 revenue to $549.3 million (from $555.7 million), reflecting softer CTV revenues in the back half of FY23. Also, he lowered the adjusted EBITDA estimate to $171.2 million (from $181.8 million) for FY23, expecting MediaMath bankruptcy to weigh by $5 million. 

Zangler cut the FY24 revenue estimate to $594.8 million (from $608.4 million), citing it as conservative due to the imminent political election in the year bound to attract ad spend. Also, the analyst lowered the FY24 adjusted EBITDA estimate to $199.4 million from $210.7 million. 

RBC Capital Markets reduced the price target to $18 from $20, maintaining an Outperform rating.

Analyst Matthew Swanson is focused on incremental benefits in the CTV segment despite macro economic factors weighing on the results and guidance.

The analyst lowered the estimates for revenue to $545.7 million (from $559.0 million) and adjusted EBITDA to $167.9 million (from $184.2 million) for FY23.  

Affirming the Buy rating, B. Riley Securities lowered the price target to $16 from $20.

Price Action: MGNI shares are down 35.1% at $8.01 on the last check Thursday.