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RBC Segregates Walled Garden Advertisers Like Amazon, Google From Open-Internet Players Like Magnite, PubMatic, Tremor & Trade Desk


  • 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.



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