Wolfe Research Starts PubMatic Inc (PUBM) at Outperform

Wolfe Research analyst Shweta Khajuria initiates coverage on PubMatic Inc (NASDAQ: PUBM) with a Outperform rating, PT $25.00.

The analyst comments "Our rating is based on our view that, in the mid-term, we see opportunities for both, multiple expansion and upward estimates revisions, driven by incremental benefits of Supply Path Optimization (SPO) resulting in further consolidation, secular tailwinds (CTV and Retail Media), product innovation (Activate, Convert, Connect), and scale benefits with its O&O infrastructure. That said, we acknowledge that it's a volatile stock with some potential nearterm headwinds from one of Pubmatic’s top DSPs modifying its bidding algorithm. Finally, valuation at current levels looks highly reasonable. Valuation: Our PT of $25 is based on a ‘25E EV/EBITDA multiple of 11x. This multiple is still below similar digital ads comp group median multiple and inline with PUBM’s closest comp, hence reasonable in our view. For context, PUBM shares are currently trading at 8.9x '25 EBITDA vs. the stock’s 5-year historical median of 9.2x."

For an analyst ratings summary and ratings history on PubMatic Inc click here. For more ratings news on PubMatic Inc click here.

Shares of PubMatic Inc closed at $20.20 yesterday.

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