Is Magnite (MGNI) Headed for a Breakdown?

Magnite Inc. (MGNI) is an independent sell-side advertising platform that combines Rubicon Project’s programmatic expertise with Telaria’s leadership in CTV. The company provides a technology solution to automate the purchase and sale of digital advertising inventory…

Magnite Inc. (MGNI) is considered the largest independent ad platform for video content producers looking to monetize their work. MGNI should continue to benefit from the growth of online video. However, branded advertising could see some disruption from supply chain challenges.

The company has a current ratio of 1.2, indicating it has more than enough liquidity to handle short-term liquidity. Sales have grown an average of 40.5% per year over the past three years. Analysts expect revenue to rise 89.8% for the year.

The stock looks overvalued with a trailing P/E of 112.74 and a forward P/E of 34.60. MGNI was showing bearish momentum from February to May, but performance has been mixed since. This is evident in the chart below.

Take a look at the 1-year chart of MGNI below with added notations…

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