Magnite (MGNI) shares soared 8.2% in the last trading session to close at $35.42. The move was backed by solid volume with far more shares changing hands than in a normal session. This compares to the stock's 8.9% gain over the past four weeks.
The upswing in share price came after Alphabet announced that Google Chrome web browser would delay the removal of third-party cookies that help advertisers track internet users. The company now expects to phase out third-party cookies over a three-month period beginning in mid-2023.
The original decision to remove cookies, which Google had been building toward since 2019, was seen as a negative for ad tech platforms as it would make it harder for them to track user activity and therefore deliver value for clients.
Magnite is a leading supply-side platform, increasingly focused on connected TV, which is mostly outside of Google's domain. The company acknowledges the risk in the third-party cookies model being disrupted, but expects that it could benefit from the shift as a sell-side platform. This would give more power to the publishers that are Magnite's clients and develop better access to user data.
This digital ad exchange operator is expected to post quarterly earnings of $0.11 per share in its upcoming report, which represents a year-over-year change of +210%. Revenues are expected to be $95 million, up 124.3% from the year-ago quarter.
Earnings and revenue growth expectations certainly give a good sense of the potential strength in a stock, but empirical research shows that trends in earnings estimate revisions are strongly correlated with near-term stock price movements.
For Magnite, the consensus EPS estimate for the quarter has been revised 400% higher over the last 30 days to the current level. And a positive trend in earnings estimate revision usually translates into price appreciation. So, make sure to keep an eye on MGNI going forward to see if this recent jump can turn into more strength down the road.
The stock currently carries a Zacks Rank 2 (Buy). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>
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