PubMatic PUBM is set to release its second-quarter 2024 results on Aug 8.
For the second quarter, the company expects revenues between $69 million and $71 million, indicating growth of 11% year over year at the midpoint of the guidance.
The Zacks Consensus Estimate for the top line is currently pegged at $70.23 million, indicating 10.9% growth from the year-ago quarter’s reported figure.
The consensus mark for earnings has been unchanged at a loss of 2 cents per share in the past 30 days, suggesting an 81.82% surge from the figure reported in the year-ago quarter.
PubMatic, Inc. Price and EPS Surprise
PubMatic, Inc. price-eps-surprise | PubMatic, Inc. Quote
Over the trailing four quarters, the company’s earnings beat the Zacks Consensus Estimate thrice and missed in the remaining one, the average surprise being 63.14%.
Let’s see how things have shaped up prior to this announcement:
Factors to Consider
In the second quarter, PubMatic’s top line is expected to have benefited from an expanding Connected TV publisher base and spending. A well-diversified portfolio of advertisers has been a tailwind for the company.
The evolving digital advertising ecosystem is creating increased demand for advanced sell-side technology. PUBM’s focus on optimizing ad inventory and audience monetization is expected to have driven top-line growth in the to-be-reported quarter.
The company’s supply path optimization (SPO) activity, which helps buyers efficiently access premium inventory, is anticipated to have driven significant growth. SPO’s share of total buyer activity on PubMatic’s platform increased to 50% in the first quarter and this is expected to have continued rising. The net spend retention rate from SPO partners was 125% in the first quarter, indicating ongoing solid relationships with advertisers.
The company’s Activate platform, which provides scaled access to premium video inventory and the recent expansion into Latin America are expected to have boosted further growth. Additionally, PubMatic’s partnership with GroupM and their new AI-generated cohort-based audience models are anticipated to have strengthened their market position.
PubMatic is adding new clients and expanding relationships with existing ones. For example, recent additions like DISH Media, Vevo and Virgin Media are expected to have contributed positively to revenue growth.
The OpenWrap solution, which enhances yield for publishers and streamlines their operations, continues to see increased adoption. As more publishers recognize its benefits, this will likely drive additional revenues.
The commerce media platform Convert is positioned to have benefited from the transition away from third-party cookies and growth of retail media. Partnerships with platforms like Instacart highlight PUBM’s role in leveraging first-party data for targeted advertising.
What Our Model Indicates
Per the Zacks model, the combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that’s not the case here.
PubMatic has an Earnings ESP of 0.00% and carries a Zacks Rank #3. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Stocks to Consider
Here are some companies worth considering, as our model shows that these have the right combination of elements to beat on earnings in their upcoming releases:
Brinker International EAT has an Earnings ESP of +8.02% and a Zacks Rank #1 at present. You can see the complete list of today’s Zacks #1 (Strong Buy) Rank stocks here.
Brinker International’s shares have increased 36.9% year to date. EAT is set to report fourth-quarter fiscal 2024 results on Aug 8.
DigitalOcean DOCN has an Earnings ESP of +2.19% and a Zacks Rank of #1 at present.
DigitalOcean’s shares have declined 25.7% year to date. DOCN is set to report its second-quarter 2024 results on Aug 8.
Affirm AFRM has an Earnings ESP of +19.64% and a Zacks Rank #2 at present.
Affirm’s shares have declined 50% year to date. AFRM is scheduled to release fourth-quarter fiscal 2024 results on Aug 28.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
