Value
6.3/10data confidence 100%| Component | Sub-score |
|---|---|
| P/E | 7.4 |
| P/S | 7.8 |
| EV/EBITDA | 0.2 |
| Fwd P/E | 8.1 |
| PEG | 7.3 |
| Analyst target | 6.0 |
- ▸Forward P/E: 14.8x
- ▸PEG: 0.95
MGNI · Why this verdict
Why Magnite (MGNI) is rated SELL
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results.
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VerdictSELL
Overall score5.5/10
ConfidenceMEDIUM
MacroNEUTRAL
TrendMatrix Research · core thesis
Engine thesis — one sentence
Attractive valuation relative to earnings power and strong analyst conviction support more than 18% headroom to target with a roughly 2.7-to-1 risk/reward, but near-zero free cash conversion and an extreme options skew inject meaningful uncertainty into the bull thesis.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
A forward P/E of 13.6 times with a PEG of 0.77 screens attractively, suggesting the market is pricing in less growth than analysts expect — a setup that can re-rate favorably if earnings continue to deliver. Valuation breakdown | Forward P/E remains below 18x and the company delivers at least 2 consecutive quarterly beats, sustaining the valuation-to-growth argument. | →Stable |
| CounterThe stock's technical positioning sits near the low end of its 52-week range and above max pain, suggesting the valuation discount may reflect genuine uncertainty about near-term earnings trajectory rather than a mispricing. | ||
A cluster of five analyst actions recently detected, combined with an aggregate analyst upside of 32% and an average rating near the top of the consensus range, reflects unusually concentrated institutional buy-side conviction. Engine gate (passed) | Analyst consensus price target increases by more than 10% over the next 2 quarters, sustaining the upside gap. | →Stable |
| CounterAnalyst clusters are a lagging signal and may follow recent price strength; if momentum stalls, consensus targets tend to be revised down rather than remaining as forward anchors. | ||
Free cash flow accounts for only 1% of reported net income — a red flag indicating the business is not yet converting earnings into cash at scale, which limits the durability of the fundamental bull case. Quality breakdown | Free cash flow rises to at least 50% of net income for 2 consecutive quarters, demonstrating meaningful cash generation progress. | →Stable |
| CounterA Piotroski F-score of 7 out of 9 and operating margins of 22% indicate the income statement is healthy; the near-zero cash conversion may reflect a temporary working-capital or investment-timing dynamic. | ||
A put/call ratio of 6.05 — among the most extreme hedging skews observable — signals that a significant portion of options activity is positioned defensively, reflecting concentrated uncertainty or downside hedging around this name. Risk breakdown | Put/call ratio falls below 2.0 over the next 2 months as uncertainty resolves. | →Stable |
| CounterOn-balance volume is rising, the most recent quarter's volume surged to 2.2 times the average on an up move, and the momentum score is 8.3 — underlying accumulation signals suggest demand may be robust despite the elevated options skew. | ||
A forward P/E of 13.6 times with a PEG of 0.77 screens attractively, suggesting the market is pricing in less growth than analysts expect — a setup that can re-rate favorably if earnings continue to deliver.
→StableValuation breakdown
- Expectation
- Forward P/E remains below 18x and the company delivers at least 2 consecutive quarterly beats, sustaining the valuation-to-growth argument.
CounterThe stock's technical positioning sits near the low end of its 52-week range and above max pain, suggesting the valuation discount may reflect genuine uncertainty about near-term earnings trajectory rather than a mispricing.
A cluster of five analyst actions recently detected, combined with an aggregate analyst upside of 32% and an average rating near the top of the consensus range, reflects unusually concentrated institutional buy-side conviction.
→StableEngine gate (passed)
- Expectation
- Analyst consensus price target increases by more than 10% over the next 2 quarters, sustaining the upside gap.
CounterAnalyst clusters are a lagging signal and may follow recent price strength; if momentum stalls, consensus targets tend to be revised down rather than remaining as forward anchors.
Free cash flow accounts for only 1% of reported net income — a red flag indicating the business is not yet converting earnings into cash at scale, which limits the durability of the fundamental bull case.
→StableQuality breakdown
- Expectation
- Free cash flow rises to at least 50% of net income for 2 consecutive quarters, demonstrating meaningful cash generation progress.
CounterA Piotroski F-score of 7 out of 9 and operating margins of 22% indicate the income statement is healthy; the near-zero cash conversion may reflect a temporary working-capital or investment-timing dynamic.
A put/call ratio of 6.05 — among the most extreme hedging skews observable — signals that a significant portion of options activity is positioned defensively, reflecting concentrated uncertainty or downside hedging around this name.
→StableRisk breakdown
- Expectation
- Put/call ratio falls below 2.0 over the next 2 months as uncertainty resolves.
CounterOn-balance volume is rising, the most recent quarter's volume surged to 2.2 times the average on an up move, and the momentum score is 8.3 — underlying accumulation signals suggest demand may be robust despite the elevated options skew.
Per-dimension breakdown
Quality
5.3/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 6.4 |
| ROA | 1.6 |
| Gross margin | 8.7 |
| Op margin | 1.9 |
| Net margin | 10.0 |
| Current ratio | 4.0 |
| FCF quality | 0.1 |
| Moat | 7.0 |
| Piotroski F | 7.8 |
- ▸Strong margins: 22%
- ▸Earnings quality RED FLAG: 1% FCF/NI
- ▸Strong Piotroski F-Score: 7/9
Growth
4.5/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 3.9 |
| EPS growth | 5.1 |
Momentum
6.3/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 4.4 |
| MACD | 9.2 |
| OBV | 10.0 |
| MA position | 8.0 |
| Volume | 0.0 |
- ▸Overbought (RSI 71)
- ▸Volume accumulation (rising OBV)
- ▸Above 200-MA but MA slope flat
Sentiment
7.4/10data confidence 100%| Component | Sub-score |
|---|---|
| Analyst rating | 8.6 |
| Price target | 8.1 |
| erm sentiment | 4.6 |
- ▸Analyst upside: 24%
Insider
5.0/10data confidence 50%| Component | Sub-score |
|---|---|
| materiality | 5.0 |
| holder change | 5.1 |
- ▸Insider selling (low materiality) — $492,272 (0.019% of mkt cap)
Peer rank
5.0/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 4.7 |
| quality rank | 8.2 |
| growth rank | 2.2 |
- ▸Attractive P/E vs peers
- ▸Superior ROE vs peers
Technical
2.7/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 2.4 |
| support resistance | 2.4 |
| 52w position | 3.4 |
Risk (lower is worse)
4.0/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 5.2 |
| days to cover | 6.3 |
| volatility | 0.0 |
| put call | 7.5 |
| implied vol | 0.0 |
| max pain risk | 3.0 |
| beta | 2.3 |
| debt equity | 8.1 |
- ▸High IV: 84%
- ▸Above max pain $1
Catalyst
6.9/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 10.0 |
| earnings timing | 5.0 |
| surprise avg | 7.7 |
How the verdict was assembled
Engine trigger
Multiple concerning factors. Consider reducing position.
Engine technical detail
verdict_path:
L4:PATH_F_SELLPassed (6)
- MOMENTUM:6.3>=5.5
- INSIDER:OK
- NEWS_EVENTS:NONE_RECENT
- EARNINGS_PROXIMITY:41d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (1)
- ASYMMETRY:0.8<1.5@spot
Warning (2)
- DEATH_CROSS:momentum=6.3>=5.0 recovering
- 8K_CSUITE_CHANGE:5.02 (officer departure/appointment)
Reward-to-Risk
0.77
Upside
+11.6%
Downside
15.0%
Sizing output
AVOID
SetupRECOVERY — Death cross but MACD improving, RSI 71
EdgeNO_EDGE — No clear edge identified
SuitabilityAGGRESSIVE — Beta 2.31>1.3, MCap $2.6B<$5B
Investment implication
The F-path SELL output reflects an overall score of 5.5 below the 5.6 soft trigger — multiple weakening dimensions accumulated rather than a single hard-floor breach. The strongest dimension ( Sentiment at 7.4) was not enough to lift the adjusted overall above the threshold. Co-occurring failed gates ( ASYMMETRY:0.8<1.5@spot) reinforce the read. Current asymmetry R:R is 0.77 — supplementary context, not the trigger for this path.
The strongest dimensions are Sentiment at 7.4, Catalyst at 6.9, and Value at 6.3; the weakest are Technical at 2.7, Risk (lower is worse) at 4.0, and Growth at 4.5. The V9 engine flagged 1 failed gate with 2 warnings, producing an asymmetric reward-to-risk of 0.77 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1A forward P/E of 13.6 times with a PEG of 0.77 screens attractively, suggesting the market is pricing in less growth than analysts expect — a setup that can re-rate favorably if earnings continue to deliver.
Trip ifForward P/E expands above 22x for 2 consecutive quarters.
- P2A cluster of five analyst actions recently detected, combined with an aggregate analyst upside of 32% and an average rating near the top of the consensus range, reflects unusually concentrated institutional buy-side conviction.
Trip ifAnalyst consensus price target falls more than 10% from current levels for 2 consecutive months.
- P3Free cash flow accounts for only 1% of reported net income — a red flag indicating the business is not yet converting earnings into cash at scale, which limits the durability of the fundamental bull case.
Trip ifFree cash flow rises above 50% of net income for 2 consecutive quarters.
- P4A put/call ratio of 6.05 — among the most extreme hedging skews observable — signals that a significant portion of options activity is positioned defensively, reflecting concentrated uncertainty or downside hedging around this name.
Trip ifPut/call ratio falls below 2.0 for 2 consecutive months.