PubMatic (PUBM) AI Stock Analysis

• Market Cap: $397.31M
• Dividend Yield: N/A
• Average Volume (3M): 462.46K
• Price to Earnings (P/E): ―
• Beta (1Y): 1.35
• Revenue Growth: -0.68%
• EPS Growth: -146.14%
• Country: US
• Employees: 1,049
• Sector: Technology
• Sector Strength: 88
• Industry: Software - Application
• EPS (TTM): -0.14
• Shares Outstanding: 38,151,560
• 10 Day Avg. Volume: 378,732
• 30 Day Avg. Volume: 462,462
• PEG Ratio: 1.23
• Price to Book (P/B): 2.61
• Price to Sales (P/S): 2.48
• P/FCF Ratio: 12.95
• Enterprise Value/Market Cap: 0.73
• Enterprise Value/Revenue: 1.00
• Enterprise Value/Gross Profit: 1.55
• Enterprise Value/Ebitda: 8.32
• 1Y Price Target: $12.92
• Price Target Upside: 50.93% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 7
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 59 Neutral
• Price Target: $9.50 ▲(10.98% Upside)

PubMatic's overall score reflects a challenging financial performance with declining profitability and revenue growth. However, strong growth in CTV and emerging revenue streams driven by AI innovations provides a positive outlook. The technical analysis suggests moderate momentum, while valuation concerns remain due to negative earnings. The lawsuit against Google adds a layer of risk, but also potential for positive change in the competitive landscape.

Positive Factors

CTV Revenue Growth

Significant growth in CTV revenue indicates strong market demand and successful platform adoption, enhancing long-term revenue potential.

AI-Driven Innovations

AI-driven improvements enhance platform efficiency and advertiser performance, providing a competitive edge and supporting future growth.

Emerging Revenue Streams

Strong growth in emerging revenue streams diversifies income sources, reducing reliance on traditional segments and supporting long-term stability.

Negative Factors

Declining Profitability

Declining profitability indicates operational challenges, which could hinder reinvestment and growth if not addressed.

Display Revenue Decline

A decline in display revenue suggests challenges in maintaining traditional ad segments, potentially impacting overall revenue.

Regional Revenue Decline

Regional revenue decline in The Americas highlights market-specific challenges that could affect overall growth and market positioning.

PubMatic Business Overview & Revenue Model

Company Description

PubMatic, Inc. provides a cloud infrastructure platform that enables real-time programmatic advertising transactions for Internet content creators and advertisers worldwide. The company's solutions include Openwrap, a header bidding solution that provides enterprise-grade management and analytics tools; Openwrap OTT, a header bidding management solution for OTT; Openwrap SDK, a header bidding solution for in-app developers; private marketplace solutions; and media buyer consoles. In addition, it offers Real-Time Bidding (RTB) programmatic technologies, which provides various selling options across screens and ad formats; digital advertising inventory quality solutions to detect and filter out invalid traffic and other nefarious activity; Ad quality solutions targeting the reduction of security issues, quality issues, and performance issues; Identity Hub, an identity solution that allows for the use of any advertiser preferred user identifier in a scaled and privacy-compliant fashion; Audience Encore, an audience data platform; and cross-platform video, a sell side platform, which connects trusted video buyers to premium publishers. The company's platform supports an array of ad formats and digital device types, including mobile app, mobile web, desktop, display, video, over-the-top (OTT), connected television, and media. PubMatic, Inc. was incorporated in 2006 and is based in Redwood City, California.

How the Company Makes Money

PubMatic generates revenue primarily through its programmatic advertising platform, which operates on a cost-per-impression (CPM) model. The company earns money by charging advertisers for each ad impression served through its platform, while also taking a percentage of the revenue generated by publishers when their inventory is sold. Key revenue streams include the sale of ad space to advertisers, fees for data analytics services, and additional premium features offered to both publishers and advertisers. Significant partnerships with major advertising agencies and brands enhance its market reach and contribute to its earnings, as they leverage PubMatic's technology to optimize their digital advertising strategies.

PubMatic Financial Statement Overview

Summary

PubMatic's financial performance is mixed, with declining revenue growth and negative net profit margins. The balance sheet is stable with low leverage, but the negative return on equity is concerning. Cash flow shows improvement in free cash flow, but income conversion to cash needs attention.

Income Statement

PubMatic's income statement shows a concerning trend with declining revenue growth and negative net profit margins in the TTM period. The gross profit margin remains relatively stable, but the EBIT margin has turned negative, indicating operational challenges. Historical data shows a peak in profitability in 2021, with declining margins since then.

Balance Sheet

The balance sheet reflects a stable financial position with a low debt-to-equity ratio, indicating prudent financial management. However, the return on equity has turned negative in the TTM period, suggesting inefficiencies in generating returns from equity. The equity ratio remains strong, highlighting a solid asset base.

Cash Flow

Cash flow analysis reveals strong free cash flow growth in the TTM period, but the operating cash flow to net income ratio is low, indicating potential issues in converting income into cash. Historical free cash flow growth has been volatile, with significant improvements recently.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	288.38M	291.26M	267.01M	256.38M	226.91M	148.75M
Gross Profit	185.84M	190.23M	167.78M	174.87M	168.59M	107.56M
EBITDA	34.70M	49.28M	46.81M	77.55M	74.46M	47.50M
Net Income	-7.25M	12.50M	8.88M	28.70M	56.60M	26.61M
Balance Sheet
Total Assets	676.19M	739.52M	695.24M	642.17M	550.22M	371.25M
Cash, Cash Equivalents and Short-Term Investments	136.55M	140.59M	175.34M	174.40M	159.63M	100.98M
Total Debt	44.59M	45.38M	28.21M	26.59M	25.69M	1.56M
Total Liabilities	431.13M	462.26M	399.04M	329.99M	293.04M	195.82M
Stockholders Equity	245.06M	277.26M	296.20M	312.19M	257.18M	175.43M
Cash Flow
Free Cash Flow	48.21M	34.90M	52.83M	38.32M	49.32M	-7.07M
Operating Cash Flow	80.95M	73.42M	81.12M	87.21M	88.68M	24.33M
Investing Cash Flow	30.05M	22.31M	-39.02M	-81.37M	-96.72M	-29.88M
Financing Cash Flow	-53.76M	-73.48M	-55.98M	4.04M	9.36M	52.48M

PubMatic Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 8.56
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For PUBM, the sentiment is Negative. The current price of 8.56 is below the 20-day moving average (MA) of 8.90, below the 50-day MA of 8.84, and below the 200-day MA of 9.78, indicating a bearish trend. The MACD of -0.06 indicates Positive momentum. The RSI at 42.68 is Neutral, neither overbought nor oversold. The STOCH value of 36.67 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for PUBM.

PubMatic Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
DSP	65 Neutral	$725.48M	440.15	4.45%	―	22.97%	49.49%
SMRT	62 Neutral	$346.24M	-5.12	-25.48%	―	-24.30%	-181.62%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
ONTF	59 Neutral	$338.00M	-10.77	-20.20%	―	-6.23%	28.57%
PUBM	59 Neutral	$397.31M	-46.80	-2.85%	―	-0.68%	-146.14%
API	56 Neutral	$388.07M	86.10	0.84%	―	1.62%	―
CMRC	46 Neutral	$336.43M	-24.73	-37.23%	―	2.97%	53.53%