Magnite Shows Strength With Netflix Partnership, Analyst Expects $30M In Revenue By 2025

Benzinga ·  May 25 02:15

BofA Securities analyst Omar Dessouky upgraded Magnite, Inc. (NASDAQ:MGNI) to Buy from Neutral, raising the price forecast to $15 from $13.

Per Dessouky, Magnite will become the leading supply-side tech solution in CTV advertising as the industry transitions to more automated ad execution, a technology the company specializes in.

The analyst highlights the company's flexibility for both buy-side and sell-side stakeholders because of its technology, as demonstrated by its recently announced exclusive partnerships with Netflix, Inc. (NASDAQ:NFLX) and MediaOcean.

The Netflix partnership is expected to generate a $30-million revenue run rate by the end of 2025.

Dessouky remains consistent with management's expectation for Netflix to become its largest CTV client by year-end 2025.

Based on the same model, Dessouky estimates that the Netflix partnership could contribute $44 million/$69 million/$199 million to Magnite's revenue in 2026, 2027 and 2028.

Dessouky also applauds Magnite's differentiated product offering, combining both an ad server and an SSP, which serves as a central nexus for publishers' programmatic pipes irrespective of the buying route.

Moreover, recent read-throughs from Walt Disney Company (NYSE:DIS) and Paramount Global (NASDAQ:PARA) suggests a programmatic transition is well underway (~50% by 2024 end) among premium streaming services, supportive of a multiyear share gainer story for Magnite.

Price Action: MGNI shares are trading higher by 11.8% to $12.38 at last check Friday.

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