Magnite (MGNI) Net Margin Surge Challenges Bearish Earnings Narratives

Simply Wall St.02-27 17:34

Magnite (MGNI) closed out FY 2025 with Q4 revenue of US$205.4 million and basic EPS of US$0.86, capped by trailing 12 month EPS of US$1.01 that sits on trailing 12 month revenue of US$714.0 million. ...

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Over the past six quarters in this dataset, revenue has moved from US$162.0 million in Q3 2024 to US$205.4 million in Q4 2025, while quarterly EPS shifted from US$0.04 to US$0.86, creating a backdrop where margins have become a central focus for investors assessing the latest print.\nSee our full...","collect":0,"end_time":0,"defaultTopTitle":"simplywall.st","property":["earning"],"viewcount":null,"language":"en","relate_stocks":{"MGNI":"Magnite, Inc."},"translate_title":"Magnite(MGNI)净利润飙升挑战看跌的盈利叙述","themeId":null,"isJumpTheme":false,"ttsUrl":null,"symbols_score_info":{"MGNI":1.5},"content_text":"Magnite (MGNI) closed out FY 2025 with Q4 revenue of US$205.4 million and basic EPS of US$0.86, capped by trailing 12 month EPS of US$1.01 that sits on trailing 12 month revenue of US$714.0 million. Over the past six quarters in this dataset, revenue has moved from US$162.0 million in Q3 2024 to US$205.4 million in Q4 2025, while quarterly EPS shifted from US$0.04 to US$0.86, creating a backdrop where margins have become a central focus for investors assessing the latest print. See our full analysis for Magnite. With the headline numbers on the table, the next step is to set them against the widely shared narratives around Magnite, to see which stories the recent results support and which might be called into question. See what the community is saying about Magnite NasdaqGS:MGNI Revenue & Expenses Breakdown as at Feb 2026 AdvertisementNet margin jumps to 20.3% on trailing basis  Over the last 12 months in this dataset, Magnite's net profit margin sits at 20.3% on US$713.9 million of revenue, compared with 3.4% a year earlier, while trailing net income is US$144.6 million. Supporters of the bullish view point to this very large earnings expansion and margin step up as evidence that Magnite's AI tools and CTV focus are starting to pay off, yet:\n     Trailing EPS over the same period is US$1.01, which lines up with the idea of improved profitability, but bulls are arguing for margins rising even further to 31.3% by around 2028, which goes well beyond what is visible in the current 20.3% margin. The bullish narrative assumes earnings could reach US$271.9 million, more than 6x the US$43.1 million starting point cited in that view, so your question is whether the current margin level feels like an early step on that path or closer to a ceiling.    Bulls argue this profitability reset could be the starting point for a much bigger earnings story, not the end of it. 🐂 Magnite Bull Case Low 13.5x P/E versus peers and DCF fair value  Magnite trades on a trailing P/E of 13.5x, compared with 72.9x for peers and 14.1x for the US Media industry, and the supplied DCF fair value of US$44.24 sits well above the current US$13.48 share price. Critics in the bearish camp argue that even with this lower P/E, earnings headwinds matter because:\n     The same dataset shows forecasts calling for earnings to decline by about 10.8% per year over the next three years, while revenue growth is pegged at 5% a year versus a 10.4% projection for the wider US market, which pulls in the opposite direction to the implied upside from the 69.5% discount to DCF fair value. Bearish assumptions still build in revenue growing around the high single digits and margins rising from 6.3% to 13.3%, yet they pair that with a required 29.3x P/E in 2028, so if earnings growth undershoots those inputs, even today's 13.5x multiple might not look as cheap to them.    Skeptics warn that a low P/E can be a value trap if the projected earnings slide actually plays out. 🐻 Magnite Bear Case Quarterly EPS swing highlights volatility risk  Within FY 2025, Basic EPS moved from a loss of US$0.07 in Q1 to US$0.86 in Q4, with net income shifting from a loss of US$9.6 million to a profit of US$123.1 million as quarterly revenue ranged between US$155.8 million and US$205.4 million. The consensus narrative talks about a steadier climb in profitability as CTV and partnerships mature, but this sharp EPS swing suggests:\n     Trailing EPS of US$1.01 and trailing net income of US$144.6 million sit on top of a year that included both a loss making quarter and a very strong Q4, so investors leaning on the trailing margin need to decide how much weight to give that variability. Analysts in the dataset expect margins to move from 6.3% to 23.8% over the next few years, yet the quarterly pattern shows that even within one year, profitability can move a long way in both directions, which is an important context check for any straight line margin story.    Next Steps To see how these results tie into long-term growth, risks, and valuation, check out the full range of community narratives for Magnite on Simply Wall St. Add the company to your watchlist or portfolio so you'll be alerted when the story evolves. If this mix of strong margins and forecast questions feels finely balanced, it is worth acting now to test the data yourself and see which side you lean toward, including reviewing our breakdown of 2 key rewards and 1 important warning sign. See What Else Is Out There Magnite's story mixes a sharp swing in quarterly EPS with forecasts of earnings declines and margin uncertainty, which may leave you questioning consistency and resilience. If that volatility makes you want steadier prospects, take a few minutes to scan our 80 resilient stocks with low risk scores and quickly spot companies screened for more consistent risk profiles.  This article by Simply Wall St is general in nature. We provide commentary based on historical data\n    and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your\n    financial situation. We aim to bring you long-term focused analysis driven by fundamental data.\n    Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.\n    Simply Wall St has no position in any stocks mentioned.New: Manage All Your Stock Portfolios in One PlaceWe've created the ultimate portfolio companion for stock investors, and it's free.• Connect an unlimited number of Portfolios and see your total in one currency• Be alerted to new Warning Signs or Risks via email or mobile• Track the Fair Value of your stocksTry a Demo Portfolio for FreeHave feedback on this article? Concerned about the content? Get in touch with us directly. 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