Politixia
- RBC Capital analyst Matthew Swanson acknowledged that earnings to date from walled-garden advertisers split into two groups, and stocks have reacted accordingly, showing investors willing to reward upside against negative sentiment into earnings.
- Specifically, Amazon.com Inc AMZN and Alphabet Inc GOOG GOOGL were the only names to top consensus estimates by an average of 1.1%, while the remaining social players missed by an average of 5%.
- Since the start of the earnings season, he saw walled gardens decline by 11.8%, while open-internet companies have reduced by 7.5% in sympathy.
- To that extent, he felt negative sentiment at least partially priced into the print.
- Based on peer results, he felt that open-internet players in his coverage, including Magnite, Inc MGNI (Outperperform; Price Target: $22), PubMatic, Inc PUBM (Outperform; PT: $33), Tremor International Ltd TRMR (Outperform; PT: $21), and The Trade Desk, Inc TTD (Outperform; PT: $85), were more similar to the omnichannel revenue of GOOGL and AMZN than the walled gardens, creating a more defensible position for Q2 results.
- That said, the 4.3% reduction in Q3 consensus estimates for reported wall-garden peers that he saw to date directionally reflected the conservatism he anticipated in Q3 for companies, given the challenging macro and uncertainty around the timing of robust political spend.
- Price Action: MGNI shares traded higher by 0.86% at $7.71 on the last check Monday.
© 2022 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
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