PUBM - Pubmatic: The Market Is Underappreciating Its Potential
2024-06-04 12:20:28 ET
Summary
- Pubmatic has competitive advantages that could make it a winner in a consolidating industry.
- A technology-first approach, profitability, operating leverage, and scale position it well for future success.
- The current market valuation suggests these advantages and the company's earnings potential are not fully appreciated.
Pubmatic ( PUBM ), a global digital advertising supply side platform ((SSP)), has carved out a series of competitive advantages that could help it become one of the winners in a consolidating industry. Trading now at a reasonable valuation (the current P/E is a little misleading), if the company can execute on its ambitious long-term goals - or even if they fall somewhat short of them - it could be a market-beating investment for those that are willing to hold through advertising market volatility.
Pubmatic went public on 9 December 2020 at $20 a share and finished the day up 47%. It reached an all-time closing high of $69.92 on 1 March 2021 before falling to an all-time closing low of $11.16 on 1 November 2023. This wild ride is a familiar story of an unprofitable tech stock that went public in the great IPO boom of 2020/21, was accorded an absurd valuation and promptly fell to earth as interest rates rose and the rose-tinted assumptions of excitable investors began to fade into a less attractive but more realistic hue....
Pubmatic: The Market Is Underappreciating Its Potential