B.Riley Resumes PubMatic Inc (PUBM) at Buy

B.Riley analyst Daniel Day resumes coverage on PubMatic Inc (NASDAQ: PUBM) with a Buy rating and a price target of $27.00.

The analyst commented: "We are resuming coverage of PubMatic, Inc. (PUBM) with a Buy rating and a $27 PT based on an FY25E EV/adjusted EBITDA multiple of 12x. PUBM is among the largest independent supply-side platforms (SSPs), providing omni-channel technology solutions to automate the purchase and sale of digital advertising on the open Web. Despite the challenging ad spending environment in FY23, PUBM continued to outperform the broader open Web market largely due to the increasing mix of supply path optimization (SPO) deals, a strategy that consolidates the spend of large advertisers and agencies with the goal of simplifying ad tech supply chains and reducing costs. We believe that the continued momentum of SPO deals, coupled with a recovering ad spending market, growing contribution from new products, and an increasing mix of higher-margin impressions (video/mobile versus desktop), sets the stage for sustained double-digit revenue growth and adjusted EBITDA margin expansion in FY24 and FY25. As the programmatic advertising landscape continues to evolve (deprecation of third-party cookies remains top of mind), we believe the company’s owned and operated technology infrastructure, omni-channel platform, sustained product innovation, pristine balance sheet (~$175M in cash and no debt), and strong reputation as a trusted supply-side technology partner leave PUBM well positioned for continued market share gains in the coming years. While the strong YTD share performance (+33% versus the RUT^ down ~2.9%) potentially points to a more balanced risk/reward dynamic in the near term, we see a path to additional upside potential over the next several quarters, as PUBM has multiple levers to exceed current consensus expectations. "

For an analyst ratings summary and ratings history on PubMatic Inc click here. For more ratings news on PubMatic Inc click here.

Shares of PubMatic Inc closed at $21.54 yesterday.

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