Please ensure Javascript is enabled for purposes of website accessibility

Why Magnite Stock Jumped to All-Time Highs Today

By Evan Niu, CFA - Jan 22, 2021 at 5:14PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Craig-Hallum boosted its price target on the ad tech specialist.

What happened

Shares of Magnite (MGNI -5.86%) jumped 10.5% to all-time highs today after getting a price-target bump from Wall Street. Craig-Hallum boosted its valuation estimate from $25 to $45, which represents 24% upside from yesterday's closing price.

So what

Analyst Jason Kreyer reiterated a buy rating on the advertising technology specialist, arguing that Magnite will continue to benefit from the ongoing shift in ad budgets from linear TV to connected TV (CTV) platforms. The analyst believes that there are already signs of strong demand for CTV as we start 2021.

A hand holding a remote pointing at a TV

Image source: Getty Images.

For example, Magnite has an exclusive partnership with Disney-controlled Hulu, which is the largest ad-supported over-the-top (OTT) streaming service. Hulu currently has approximately 36.6 million paid subscribers, although some of the service's subscription tiers remove ads completely. Magnite also offers marketers an accelerated return on ad spending, according to Kreyer.

Now what

The COVID-19 pandemic accelerated cord-cutting throughout 2020, and many CTV companies that support OTT streaming have benefited as engagement has soared across streaming platforms.

An estimated 6.6 million households cut the cord last year, according to eMarketer, resulting in 77.6 million remaining households still subscribing to cable. That trend should continue into 2021, with 27% of households saying that they plan to cancel their cable bundles, according to a recent survey by ad tech peer The Trade Desk.

Both The Trade Desk and Magnite are positioned to capitalize from rising adoption and engagement of CTV platforms.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Magnite, Inc. Stock Quote
Magnite, Inc.
MGNI
$9.97 (-5.86%) $0.62

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning service.

Stock Advisor Returns
345%
 
S&P 500 Returns
119%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 05/17/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.