PubMatic (PUBM) AI Stock Analysis

• Market Cap: $389.59M
• Dividend Yield: N/A
• Average Volume (3M): 790.58K
• Price to Earnings (P/E): 124.6
• Beta (1Y): 1.44
• Revenue Growth: 3.53%
• EPS Growth: -109.03%
• Country: US
• Employees: 1,049
• Sector: Technology
• Sector Strength: 84
• Industry: Software - Application
• EPS (TTM): -0.11
• Shares Outstanding: 37,459,793
• 10 Day Avg. Volume: 649,665
• 30 Day Avg. Volume: 790,580
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• Enterprise Value/Market Cap: 1.32
• Enterprise Value/Revenue: 1.76
• Enterprise Value/Gross Profit: 2.72
• Enterprise Value/Ebitda: 16.60
• 1Y Price Target: $10.95
• Price Target Upside: 31.77% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 13

• Rating: 61 Neutral
• Price Target: $9.00 ▲(8.30% Upside)

PubMatic's overall stock score reflects a mixed outlook. The company's strong cash flow and strategic focus on high-growth areas like CTV and AI are positive, but profitability challenges and bearish technical indicators weigh heavily. The earnings call provided a balanced view of opportunities and risks, with notable growth in emerging revenue streams. Valuation concerns due to a negative P/E ratio further impact the score.

Positive Factors

Emerging Revenue Growth

PubMatic's solid Q2 saw upside from CTV (up over 50% y/y) and emerging revenue (Activate, sell side data, commerce media).

Potential Market Position Improvement

There is a significant potential upside for PubMatic due to expected antitrust remedies arising from Google's AdTech violations, which could boost PubMatic's market position.

Strong Growth in New Ad Formats

The company has shifted the exposure of its business to faster growing ad formats, with desktop display now just 20% of revenue and CTV 20% of revenue.

Negative Factors

Financial Pressure

The second DSP issue is projected to cause a 46% decline in adjusted EBITDA in 2025, putting pressure on PubMatic's financials.

Revenue and Earnings Decline

PubMatic faced two consecutive issues with major DSP partners, leading to significant revenue declines and headwinds expected to last for 12 months.

PubMatic Business Overview & Revenue Model

Company Description

PubMatic, Inc. (NASDAQ: PUBM) is a leading digital advertising technology company that provides a cloud infrastructure platform aimed at enabling real-time programmatic advertising transactions for both publishers and advertisers. Operating primarily within the digital advertising and technology sectors, PubMatic offers solutions designed to optimize the value of ad impressions for publishers while delivering efficient and scalable advertising opportunities for brands across various digital platforms, including mobile, desktop, and connected TVs.

How the Company Makes Money

PubMatic makes money primarily through its programmatic advertising platform, which facilitates the buying and selling of digital advertising inventory in real time. The company's revenue model is based on a take-rate structure, where PubMatic earns a percentage of the transaction value each time an ad impression is successfully sold through its platform. Key revenue streams include fees from publishers for using its sell-side platform to manage and monetize their ad inventory, as well as fees from advertisers and agencies for accessing premium ad inventory through its demand-side integrations. Significant partnerships with major digital publishers and advertising agencies further enhance PubMatic's ability to attract a broad range of clients, contributing to its overall earnings.

PubMatic Financial Statement Overview

Summary

PubMatic exhibits a mixed financial performance with strong cash flow and a solid balance sheet, but faces challenges in profitability as indicated by the income statement. The company has shown resilience in revenue growth, but recent declines in profit margins and return on equity need to be addressed. Maintaining strong cash flow and a conservative leverage position provides a stable foundation for addressing these challenges and pursuing growth opportunities.

Income Statement

PubMatic's income statement shows a mixed performance. The TTM data indicates a slight revenue growth of 1.33%, but the company is currently experiencing a negative net profit margin of -0.58%, reflecting a recent downturn in profitability. Historical data shows a decline in gross profit margin from 74.3% in 2021 to 64.9% in TTM, indicating pressure on cost management. The EBIT margin has also turned negative, suggesting operational challenges. However, the company has demonstrated resilience in revenue growth over the years, which is a positive sign.

Balance Sheet

The balance sheet of PubMatic is relatively strong, with a low debt-to-equity ratio of 0.19 in TTM, indicating a conservative leverage position. However, the return on equity has turned negative in TTM, reflecting recent profitability challenges. The equity ratio remains stable, suggesting a solid capital structure. Overall, the company maintains a healthy balance sheet with manageable debt levels, but recent profitability issues need attention.

Cash Flow

PubMatic's cash flow statement shows robust free cash flow growth of 52.18% in TTM, indicating strong cash generation capabilities. The operating cash flow to net income ratio is healthy, suggesting efficient cash conversion. The free cash flow to net income ratio of 0.58 in TTM highlights the company's ability to generate cash relative to its earnings, despite recent net income challenges. Overall, the cash flow position is strong, supporting future investments and operations.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	292.21M	291.26M	267.01M	256.38M	226.91M	148.75M
Gross Profit	189.56M	190.23M	167.78M	174.87M	168.59M	107.56M
EBITDA	31.03M	49.28M	46.81M	77.55M	74.46M	47.50M
Net Income	-1.71M	12.50M	8.88M	28.70M	56.60M	26.61M
Balance Sheet
Total Assets	675.22M	739.52M	695.24M	642.17M	550.22M	371.25M
Cash, Cash Equivalents and Short-Term Investments	117.56M	140.59M	175.34M	174.40M	159.63M	100.98M
Total Debt	45.66M	45.38M	21.84M	26.59M	21.71M	1.56M
Total Liabilities	431.94M	462.26M	399.04M	329.99M	293.04M	195.82M
Stockholders Equity	243.28M	277.26M	296.20M	312.19M	257.18M	175.43M
Cash Flow
Free Cash Flow	28.29M	55.83M	52.83M	38.32M	49.32M	-7.07M
Operating Cash Flow	67.71M	73.42M	81.12M	87.21M	88.68M	24.33M
Investing Cash Flow	28.06M	22.31M	-39.02M	-81.37M	-96.72M	-29.88M
Financing Cash Flow	-79.31M	-73.48M	-55.98M	4.04M	9.36M	52.48M

PubMatic Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 8.31
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• 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 8.31 is below the 20-day moving average (MA) of 8.81, below the 50-day MA of 10.94, and below the 200-day MA of 12.26, indicating a bearish trend. The MACD of -0.73 indicates Negative momentum. The RSI at 35.79 is Neutral, neither overbought nor oversold. The STOCH value of 38.62 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
CXM	70 Neutral	$2.23B	18.86	23.74%	―	6.08%	153.79%
OLO	68 Neutral	$1.74B	593.71	-0.13%	―	21.92%	95.91%
ALKT	67 Neutral	$2.56B	―	-11.47%	―	29.63%	29.87%
Sector *	61 Neutral	$35.51B	8.11	-11.05%	1.89%	8.55%	-8.72%
PUBM	61 Neutral	$389.59M	124.65	-0.65%	―	3.53%	-109.03%
SEMR	60 Neutral	$1.14B	182.58	-0.50%	―	22.16%	-107.92%
DSP	59 Neutral	$640.21M	298.81	5.20%	―	30.92%	―

PubMatic Corporate Events

PubMatic Stockholders Approve Key Proposals at Annual Meeting

On May 30, 2025, PubMatic, Inc. held its annual meeting of stockholders, where approximately 75.55% of the total outstanding shares were represented. During the meeting, stockholders approved the election of eight directors for a one-year term, ratified the appointment of Deloitte & Touche LLP as the independent registered accounting firm for 2025, and approved the compensation of the company’s named executive officers.