What happened
Shares of Magnite (MGNI +0.39%), a supply-side adtech platform, were moving higher this week as strong earnings reports from peers like The Trade Desk (TTD 3.46%) and Roku (ROKU 0.73%) lifted expectations for the company's own earnings report next week.
According to data from S&P Global Market Intelligence, the stock had gained 17.2% for the week as of Thursday afternoon at 2:29 p.m. ET.
NASDAQ: MGNI
Key Data Points
So what
There was no major company-specific news out on Magnite, but strong earnings reports from The Trade Desk and Roku created a rising tide in the adtech industry as beaten-down stocks in the sector rose on hopes that the ad market would soon turn around.
First, The Trade Desk, which works with Magnite, soared on Wednesday after the demand-side platform said revenue rose 24% to $491 million, and adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) increased 28% to $245 million. The results were mostly in line with expectations, but show The Trade Desk continuing to attract new business even as ad growth has flatlined at leading platforms like Alphabet and Meta Platforms.
Adjusted earnings per share in the quarter fell from $0.42 to $0.38 as the company lapped a tax benefit in the quarter a year ago. The Trade Desk sees steady growth into the first quarter, calling for revenue of $363 million, up 15% from the quarter a year ago, and adjusted EBITDA around $78 million, which represents a decline from $121 million, though investors seemed willing to overlook that.
The Trade Desk stock jumped 33% yesterday, while Magnite tacked on 12%.
On Thursday, Magnite got another boost after another one of its advertising partners, Roku, issued a better-than-expected earnings report, easily beating revenue estimates, and it said there were signs that the ad market was starting to turn around in some verticals.
Magnite may be best known for its connected TV (CTV) business, so Roku's performance should have implications for Magnite. As of Thursday afternoon, Magnite stock was up 4.7% for the day while Roku had gained 17%.
Now what
Those reports seem to be leading to a sense of bullishness around Magnite's own fourth-quarter earnings report on Feb. 22. Analysts expect the company to report 8% revenue growth to $153.7 million, and see adjusted earnings per share rising from $0.26 to $0.32.
Magnite also just launched a new platform, Magnite Streaming, which merges technology from Magnite CTV and SpotX, the company it acquired in 2021, which should help the company capture more of the growth in CTV. Expect to hear more about the new product as well as expectations for 2023 in next week's report.
