PubMatic (PUBM) AI Stock Analysis

• Market Cap: $297.05M
• Dividend Yield: N/A
• Average Volume (3M): 609.78K
• Price to Earnings (P/E): ―
• Beta (1Y): 1.37
• 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: 561,964
• 30 Day Avg. Volume: 609,780
• PEG Ratio: 0.13
• Price to Book (P/B): 1.59
• Price to Sales (P/S): 1.47
• P/FCF Ratio: 6.25
• Enterprise Value/Market Cap: 0.74
• Enterprise Value/Revenue: 0.78
• Enterprise Value/Gross Profit: 1.22
• Enterprise Value/Ebitda: 12.92
• 1Y Price Target: $11.25
• Price Target Upside: 70.97% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 4
• EPS Forecast (FY): -0.57
• Revenue Forecast (FY): $279.74M

• Rating: 62 Neutral
• Price Target: $7.50 ▲(13.98% Upside)
• Action: Reiterated Date: 02/27/26
• Date: Action: Reiterated 02/27/26

The score is driven primarily by solid cash generation and a low-leverage balance sheet, supported by encouraging earnings-call momentum in CTV/emerging revenue and AI execution. Offsetting these positives are deteriorating profitability (small loss in 2025), stalled top-line growth, and weak longer-term price trend signals.

Positive Factors

Strong cash generation

PubMatic produced meaningful operating cash (~$81M) and free cash flow (~$67M) in 2025 despite a small GAAP loss. Durable FCF provides internal funding for product investment, AI scaling and working-capital needs, reducing refinancing pressure and supporting execution over the next several quarters.

Low financial leverage

A conservative balance sheet (debt/equity ~0.17) gives PubMatic flexibility to invest in growth areas like CTV and AI, absorb ad-market cyclicality, and pursue strategic initiatives without short-term liquidity stress. Low leverage preserves optionality for capital allocation decisions.

CTV, emerging revenues and AI momentum

Structural mix shift toward CTV and emerging streams, coupled with AI-driven platform efficiency (faster bids, fewer timeouts), expands addressable market and improves publisher yield. Sustained double-digit CTV and rapid emerging revenue growth signal durable product-market fit and higher-margin revenue mix.

Negative Factors

Stalled top-line growth

Revenue decelerated from prior years and was slightly negative in 2025, indicating the business is no longer on a steady growth trajectory. Prolonged top-line stagnation would limit operating leverage, pressure margins, and constrain reinvestment capacity over coming quarters.

Deteriorating profitability

PubMatic swung to a small net loss in 2025 after higher-margin years. If weaker margins persist, retained earnings and return-on-equity metrics could deteriorate, reducing financial resilience and limiting the firm's ability to sustainably fund growth or absorb ad demand shocks.

Customer/regional concentration risks

Material sensitivity to large DSPs and regional buyer shifts creates revenue volatility: a single large buyer reduced spend and drove a double-digit Americas decline. Such concentration risks can amplify ad-cycle downturns and make growth more lumpy absent broader buyer diversification.

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

Financials are mixed: cash generation is strong (operating cash flow ~$81M and free cash flow ~$67M in 2025) and leverage is low, but growth has stalled (revenue slightly down in 2025) and profitability compressed into a small loss, which is the key fundamental risk.

Income Statement

Revenue grew strongly in 2020–2022, then decelerated to low-single-digit growth in 2023–2024 and turned slightly negative in 2025 (annual revenue down from $291M to $283M). Profitability has also weakened materially: net margin fell from ~25% (2021) and ~11% (2022) to low-single digits (2023–2024) and slipped to a small loss in 2025. Gross margins remain healthy (~63–65% recently), but the swing to negative earnings suggests cost pressure and/or weaker operating leverage.

Balance Sheet

The balance sheet looks conservatively financed with low leverage (debt-to-equity ~0.17 in 2025) and a sizable equity base ($263M). However, profitability on equity has deteriorated from strong levels in 2020–2022 to modest in 2023–2024 and negative in 2025, which can weigh on balance-sheet quality over time if losses persist. Overall asset base is stable but down versus 2024 ($680M vs. $740M).

Cash Flow

Cash generation is a key strength: operating cash flow remained robust at ~$81M in 2025 and free cash flow expanded sharply to ~$67M (strong growth versus 2024). This is notable given 2025 reported a small net loss, indicating the business is still converting activity into cash. The main watch-out is that cash-flow conversion versus reported earnings can be uneven year-to-year, and free cash flow has not grown consistently every year.

Breakdown	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	282.93M	291.26M	267.01M	256.38M	226.91M
Gross Profit	179.84M	190.23M	167.78M	174.87M	168.59M
EBITDA	-17.26M	49.28M	46.81M	77.55M	74.46M
Net Income	-14.46M	12.50M	8.88M	28.70M	56.60M
Balance Sheet
Total Assets	680.20M	739.52M	695.24M	642.17M	550.22M
Cash, Cash Equivalents and Short-Term Investments	145.52M	140.59M	175.34M	174.40M	159.63M
Total Debt	43.86M	45.38M	28.21M	26.59M	25.69M
Total Liabilities	417.61M	462.26M	399.04M	329.99M	293.04M
Stockholders Equity	262.59M	277.26M	296.20M	312.19M	257.18M
Cash Flow
Free Cash Flow	66.71M	34.90M	52.83M	38.32M	49.32M
Operating Cash Flow	81.06M	73.42M	81.12M	87.21M	88.68M
Investing Cash Flow	6.07M	22.31M	-39.02M	-81.37M	-96.72M
Financing Cash Flow	-42.73M	-73.48M	-55.98M	4.04M	9.36M

PubMatic Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 6.58
• 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 Neutral. The current price of 6.58 is below the 20-day moving average (MA) of 6.65, below the 50-day MA of 7.71, and below the 200-day MA of 9.40, indicating a neutral trend. The MACD of -0.30 indicates Negative momentum. The RSI at 52.15 is Neutral, neither overbought nor oversold. The STOCH value of 70.70 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for PUBM.

PubMatic Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
ONTF	66 Neutral	$337.30M	-10.85	-20.20%	―	-6.23%	28.57%
DSP	65 Neutral	$571.89M	362.12	4.45%	―	22.97%	49.49%
PUBM	62 Neutral	$297.05M	-35.98	-2.85%	―	-0.68%	-146.14%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
API	54 Neutral	$445.11M	99.59	0.84%	―	1.62%	―
SMRT	51 Neutral	$298.94M	-4.56	-25.48%	―	-24.30%	-181.62%
CMRC	49 Neutral	$227.54M	-11.60	-53.19%	―	2.97%	53.53%