DOJ's Google Ruling Could Be a Boon for Magnite as Ad Spend Shifts
The US Department of Justice's antitrust case against Google has significant implications for Magnite (MGNI), an advertising platform that could benefit from the ruling. BofA Securities analyst Omar Dessouky believes the remedies proposed by the DOJ will lead to a shift in ad spend, with Google's AdX exchange losing up to half of its 60% market share over several years.
Dessouky estimates Magnite's share of open-web display ad spend will rise to 8-10%, up from 6%, making it a growth segment. He also predicts that Google's AdX win rate could fall to as low as 30% under fair auctions, citing the near-exclusive access it has to both demand sources and pricing data.
The analyst raised his price target on Magnite to $38, representing 48% upside from its current share price. He also increased his 2028 EBITDA estimate for the company by 28%, with room for further revisions if Magnite's win rate improves.