While Magnite (NASDAQ:MGNI) isn’t necessarily the most famous name in the tech sector, it’s a bigger company than you might think. And as an investment, MGNI stock was a serious mover last year.
If you’ve never taken a close look at the company, it might surprise you to learn that Magnite is the world’s largest independent omni-channel sell-side advertising platform.
Indeed, Magnite is only getting bigger as the company is beefing up its connected TV (CTV) services segment through a strategic acquisition.
We’ll definitely get into that, along with the company’s outstanding recent fiscal results. But first thing’s first: let’s go ahead and delve into the details of the stock’s recent price action.
MGNI Stock at a Glance
Holders of MGNI stock would undoubtedly like to repeat the performance of 2020. That year, the stock started off at around $9.
There was a plunge to $4 and change during the onset of the novel coronavirus. Yet, of course, we can’t attribute that price decline to anything specific to the company.
There’s an old saying in the financial markets: be right and sit tight. That principle certainly played out well when it came to MGNI stock.
The share price drifted along for a while, but then shot up in 2020’s fourth quarter. By the end of the year, the stock had reached $30.
There was strong follow-through in early 2021 as the stock passed the $60 mark in mid-February. However, by the afternoon of Mar. 5, the stock was trading between $37 and $38. As of the time of publication, the price is just under $44 per share.
A Spot-On Acquisition
Is the share-price pullback a reason to cut and run? With the company making a powerful move into connected TV, there’s really no need to bail on MGNI stock now.
Not long ago, Magnite entered into a definitive agreement to acquire SpotX, a global specialist in CTV and video advertising.
According to the press release, the business combination “will create the largest independent CTV and video advertising platform in the programmatic marketplace.”
Independently, Magnite and SpotX already boasted some of the world’s leading programmers, broadcasters, platforms and device manufacturers as clients.
Together, the combined company will effectively be the king of CTV advertising platforms.
Magnite CEO and President Michael Barrett touted the virtues of connected TV and of the business combination.
“Ad-supported CTV is just beginning to draw budgets from linear TV and we will be well-positioned to participate in the strongest segment of industry growth for the foreseeable future,” Barrett said.
Powerful Revenue Growth
Perhaps you’re not yet convinced of the revenue-generating potential of CTV advertising. If that’s the case, then Magnite’s fourth-quarter 2020 fiscal figures should change your mind.
The company’s quarterly revenues totaled $82 million, representing a whopping 69% improvement over 2019’s fourth-quarter revenues.
Clearly, there’s money to be made in connected TV. Looking ahead, Magnite expects revenues for 2021’s first quarter to be between $58 million and $62 million.
As the company’s CEO sees it, the SpotX acquisition should significantly contribute to those future revenues.
“SpotX is an important strategic win for Magnite and our customers, and is fast growing and highly profitable,” Barrett explained.
Moreover, “As linear TV spend accelerates its move to ad-supported CTV, we believe growth from this secular trend will fuel our growth for the foreseeable future.”
That, I believe, is a polite way of saying that the competition had better prepare for Magnite and SpotX to steal some serious market share.
If you’ve never considered Magnite and connected TV as major moneymakers, hopefully by now you’re fully convinced.
And if so, then it might be time to take advantage of the stock-price drawdown and start accumulating MGNI shares.
Currently, MGNI stock has an “A” rating and a strong buy recommendation in Portfolio Grader.
On the date of publication, neither Louis Navellier nor the InvestorPlace Research Staff member primarily responsible for this article held (either directly or indirectly) any positions in the securities mentioned in this article.
Louis Navellier had an unconventional start, as a grad student who accidentally built a market-beating stock system — with returns rivaling even Warren Buffett. In his latest feat, Louis discovered the “Master Key” to profiting from the biggest tech revolution of this (or any) generation.