Magnite, Inc. (NASDAQ:MGNI) Released Earnings Last Week And Analysts Lifted Their Price Target To US$14.67
Magnite, Inc. (NASDAQ:MGNI) just released its quarterly report and things are looking bullish. The results overall were pretty good, with revenues of US$61m exceeding expectations and statutory losses coming in at justUS$0.10 per share, some 47% below what the analysts had forecast. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there’s been a strong change in the company’s prospects, or if it’s business as usual. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.
See our latest analysis for Magnite
Taking into account the latest results, the consensus forecast from Magnite’s six analysts is for revenues of US$256.4m in 2021, which would reflect a major 36% improvement in sales compared to the last 12 months. The loss per share is expected to greatly reduce in the near future, narrowing 38% to US$0.44. Before this latest report, the consensus had been expecting revenues of US$246.4m and US$0.54 per share in losses. There’s been a pretty noticeable increase in sentiment, with the analysts upgrading revenues and making a loss per share in particular.
The consensus price target rose 35% to US$14.67, with the analysts encouraged by the higher revenue and lower forecast losses for next year. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company’s valuation. There are some variant perceptions on Magnite, with the most bullish analyst valuing it at US$16.00 and the most bearish at US$11.00 per share. As you can see, analysts are not all in agreement on the stock’s future, but the range of estimates is still reasonably narrow, which could suggest that the outcome is not totally unpredictable.
One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. One thing stands out from these estimates, which is that Magnite is forecast to grow faster in the future than it has in the past, with revenues expected to grow 36%. If achieved, this would be a much better result than the 15% annual decline over the past five years. Compare this against analyst estimates for the wider industry, which suggest that (in aggregate) industry revenues are expected to grow 18% next year. So it looks like Magnite is expected to grow faster than its competitors, at least for a while.
The Bottom Line
The most important thing to take away is that the analysts reconfirmed their loss per share estimates for next year. Happily, they also upgraded their revenue estimates, and are forecasting revenues to grow faster than the wider industry. We note an upgrade to the price target, suggesting that the analysts believes the intrinsic value of the business is likely to improve over time.
Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. At Simply Wall St, we have a full range of analyst estimates for Magnite going out to 2022, and you can see them free on our platform here..
Plus, you should also learn about the 4 warning signs we’ve spotted with Magnite (including 1 which doesn’t sit too well with us) .
This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email [email protected].
