We came across a bullish thesis on Magnite, Inc. (MGNI) on wallstreetbets Subreddit Page by 19Doughboy98. In this article, we will summarize the bulls’ thesis on MGNI. Magnite, Inc. (MGNI)’s share was trading at $16.42 as of Jan 22nd. MGNI’s trailing and forward P/E were 126.31 and 20.53 respectively according to Yahoo Finance.
Magnite (MGNI) presents a compelling investment opportunity following Netflix’s blowout Q4 earnings, which highlighted the explosive growth of ad-supported streaming. Netflix reported that 55% of its new subscribers in ad-supported markets opted for the ad tier, doubling its ad revenue year-over-year in 2024 and setting the stage for further growth in 2025. This development expands the addressable market for connected TV (CTV) advertising technology, where Magnite stands as the world’s largest independent sell-side platform. Magnite already generates 50% of its revenue from CTV and projects a 15% annual growth in this segment, aligning perfectly with the booming demand for premium ad-supported content.
Magnite’s strategic partnerships with industry giants further strengthen its market position. Its collaboration with Netflix, which began in 2024, enables programmatic advertising globally, while its long-standing relationship with Disney has expanded to include LATAM inventory, podcasts, and live sports like College Football. Additional partnerships with Samsung Ads, FIFA, United Airlines, and LG Ad Solutions highlight Magnite’s diversified reach across CTV, global video advertising, and even in-flight entertainment. These partnerships demonstrate Magnite’s ability to scale its technology and align with client needs, cementing its dominance in the $25 billion-plus CTV advertising market.
Financially, Magnite is on solid ground. In Q3 2024, it delivered $162 million in revenue (+8% YoY), $5.2 million in net income, and $50.6 million in adjusted EBITDA. Its CTV contribution ex-TAC grew by 23% YoY to $64.4 million, showcasing strong momentum. With the holiday season driving massive engagement through binge-watching and live sports, Q4 is expected to deliver significant upside. Magnite’s tech serves as the backbone for connecting advertisers with streaming platforms, earning fees for every transaction and reinforcing its value proposition as ad-supported streaming becomes a mainstay.
Operating with a $2.3 billion market cap in a rapidly growing sector, Magnite is poised for a major rerating. Its partnerships with Netflix and Disney, coupled with the broader tailwinds in CTV, position it for substantial long-term growth. As the market leader in CTV ad tech, Magnite offers a strong risk/reward opportunity with significant upside potential.
Magnite, Inc. (MGNI) is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 20 hedge fund portfolios held MGNI at the end of the third quarter which was 25 in the previous quarter. While we acknowledge the risk and potential of MGNI as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than MGNI but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
READ NEXT: 8 Best Wide Moat Stocks to Buy Now and 30 Most Important AI Stocks According to BlackRock.
Disclosure: None. This article was originally published at Insider Monkey.