PubMatic Inc (PUBM) PT Lowered to $50 but Jefferies Sees Share Gains on the Horizon

May 14, 2021 8:55 AM EDT
Get Alerts PUBM Hot Sheet
Price: $33.71 --0%

Rating Summary:
    6 Buy, 2 Hold, 0 Sell

Rating Trend: = Flat

Today's Overall Ratings:
    Up: 1 | Down: 2 | New: 37
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Jefferies analyst Brent Thill lowered the price target on PubMatic Inc (NASDAQ: PUBM) to $50.00 (from $62.00) after the company reported a 10% rev beat (+54% y/y rev growth) with EBITDA margin upside (+33% vs. street +21%). There were 5 key drivers to the upside:
1) a better-than-expected recovery in desktop display (+26% y/y rev growth)
2) 83% y/y rev growth in mobile & video (now 63% of rev)
3) accelerated pace of supply path optimization (SPO) deals (doubled share of spend coming from SPO vs. Q1'20)
4) 106% y/y growth in impressions served
5) recovery in COVID-19 impacted verticals like dining

The analyst reiterated a Buy rating, stating "We believe PUBM remains well positioned to gain share of the $300B+ digital ad market. Some key drivers of PUBM's share gains over the next several years include; 1) buyers consolidating ad spend around fewer SSPs (e.g. GroupM SPO deal in Q1), 2) ad verticals like travel and retail returning to pre-Pandemic levels in 2H21, 3) conversion to known identity solutions (e.g. Identity Hub, Audience Encore) driving more buyers to PUBM's platform, and 4) CTV, which is small (low single digit % of rev) but fast growing (+55% rev growth q/q), and could be a material driver by FY22."



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