Value
5.4/10data confidence 100%| Component | Sub-score |
|---|---|
| P/E | 5.8 |
| P/S | 7.1 |
| EV/EBITDA | 0.0 |
| Fwd P/E | 6.8 |
| PEG | 7.7 |
| Analyst target | 4.0 |
- ▸Forward P/E: 18.8x
- ▸PEG: 0.89
MGNI · Why this verdict
Why Magnite (MGNI) is rated BUY WAIT
Updated
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VerdictBUY WAIT
Overall score6.1/10
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. | ↓Deteriorating |
| 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. | ↑Improving |
| 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. | ↑Improving |
| 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. | ↓Deteriorating |
| 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.
↓DeterioratingValuation 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.
↑ImprovingEngine 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.
↑ImprovingQuality 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.
↓DeterioratingRisk 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
6.8/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 6.5 |
| ROA | 1.6 |
| Gross margin | 9.0 |
| Op margin | 6.5 |
| Net margin | 10.0 |
| Current ratio | 4.1 |
| FCF quality | 6.8 |
| Moat | 7.6 |
| Piotroski F | 8.9 |
- ▸Strong margins: 22%
- ▸Wide economic moat
- ▸Compounder quality: strong returns + growth
- ▸Strong Piotroski F-Score: 8/9
Growth
7.7/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 5.3 |
| EPS growth | 10.0 |
Momentum
6.3/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 3.8 |
| MACD | 10.0 |
| OBV | 10.0 |
| MA position | 7.5 |
| Volume | 0.0 |
- ▸Overbought (RSI 83)
- ▸Volume accumulation (rising OBV)
- ▸Above 200-MA but MA slope flat/negative + RSI 83 (late-cycle distribution risk)
Sentiment
6.9/10data confidence 100%| Component | Sub-score |
|---|---|
| LLM sentiment | 5.4 |
| Analyst rating | 8.6 |
| Price target | 6.4 |
Insider
5.5/10data confidence 100%| Component | Sub-score |
|---|---|
| materiality | 3.0 |
| insider conviction | 2.0 |
| holder change | 10.0 |
| notable moves | 7.0 |
- ▸Notable insider selling — $9,462,163 (0.273% of mkt cap)
- ▸Institutions accumulating
Peer rank
5.4/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 3.7 |
| quality rank | 8.2 |
| growth rank | 5.3 |
- ▸Superior ROE vs peers
Technical
3.4/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 0.4 |
| support resistance | 1.4 |
| 52w position | 8.3 |
Risk (lower is worse)
4.5/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 4.6 |
| days to cover | 6.8 |
| volatility | 1.0 |
| put call | 9.9 |
| implied vol | 0.1 |
| max pain risk | 3.0 |
| beta | 2.4 |
| debt equity | 8.2 |
- ▸High IV: 79%
- ▸Above max pain $10
Catalyst
6.6/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 10.0 |
| earnings timing | 5.0 |
| surprise avg | 5.1 |
| news activity | 8.0 |
How the verdict was assembled
Engine trigger
Maintain position. Not compelling to add more. | News modifier +1 (HOLD_IF_HOLDING → STRONG_BUY_WAIT).
Engine technical detail
verdict_path:
L4:PATH_F_HOLD|L3:NEWS_MOD=+1Passed (5)
- MOMENTUM:6.3>=5.5
- NEWS_BOOST:ANALYST:0.40
- EARNINGS_PROXIMITY:85d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (1)
- ASYMMETRY:-0.1=NEGATIVE
Warning (2)
- INSIDER:0.27%=MODERATE
- 8K_CSUITE_CHANGE:5.02 (officer departure/appointment)
Reward-to-Risk
-0.11
Upside
-1.6%
Downside
15.0%
Sizing output
STARTER
Setup— — No clear chart pattern; technical signals are mixed
EdgeNo clear edge — No clear edge identified
SuitabilityAggressive — Beta 2.27>1.3, MCap $3.5B<$5B
Investment implication
None of the engine's positive-conviction paths (C-quality, D-momentum) triggered — the F-path HOLD reflects balanced signals. Strongest-cleared gate: MOMENTUM:6.3>=5.5. Top dim: Growth at 7.7; weakest: Technical at 3.4. No conviction either direction.
The strongest dimensions are Growth at 7.7, Sentiment at 6.9, and Quality at 6.8; the weakest are Technical at 3.4, Risk (lower is worse) at 4.5, and Peer rank at 5.4. The V9 engine flagged 1 failed gate with 2 warnings, producing an asymmetric reward-to-risk of -0.11 and an engine sizing output of STARTER.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Attractive Valuation Earnings Power
Trip ifForward P/E expands above 22x for 2 consecutive quarters.
- P2Strong Analyst Conviction Cluster
Trip ifAnalyst consensus price target falls more than 10% from current levels for 2 consecutive months.
- P3Near Zero Free Cash Conversion
Trip ifFree cash flow rises above 50% of net income for 2 consecutive quarters.
- P4Extreme Options Skew Uncertainty
Trip ifPut/call ratio falls below 2.0 for 2 consecutive months.