PubMatic Soars 23% as Q3 Results Exceed Expectations


Online advertising software and strategies developer PubMatic, Inc. (PUBM) has reported better-than-expected results for the third quarter ended September 30, 2021. The robust results were primarily driven by growth in revenues.

Following the earnings, shares of the company gained 23% to close at $39.50 in the extended trade.

Revenue & Earnings

PubMatic reported quarterly revenues of $58.1 million, up 54% from the year-ago quarter. A 64% year-over-year rise in revenues from fast-growing advertising formats mobile and omnichannel video contributed to the overall growth in revenues. Further, the figure topped the consensus estimate of $52.55 million.

The company reported quarterly earnings per share (EPS) of $0.24, up 140% year-over-year. Moreover, the figure surpassed the consensus estimate of $0.09 per share.

Guidance

Meanwhile, the company provided guidance for the fourth quarter, full-year 2021 and full-year 2022.

For the fourth quarter, the company forecasts revenue to be between $74 million and $76 million against the consensus estimate of $62.24 million.

For 2021, the company expects revenue to be in the range of $225 million to $227 million against the consensus estimate of $208.02 million. For 2022, PUBM anticipates revenue of $281 million against the Street’s estimate of $260.22 million.

Management Commentary

The CEO of PubMatic, Rajeev Goel, said, “We delivered record revenue in the third quarter, well ahead of our expectations. We use a land and expand approach, coupled with a usage-based revenue model. When we deliver incremental value to our customers, we participate in their upside which further accelerates our profitable business model and enables us to invest for future growth. This flywheel positions us well for sustained and profitable growth and market share gains.”

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Price Target

Recently, Evercore ISI analyst Shweta Khajuria reiterated a Buy rating on the stock with a price target of $44, which implies upside potential of 37% from current levels.

Consensus among analysts is a Strong Buy based on 8 Buys and 1 Hold. The average PubMatic price target of $46.50 implies upside potential of 44.8% from current levels.

Smart Score

PubMatic scores a 9 out of 10 from TipRanks’ Smart Score rating system, indicating that the stock is likely to outperform the market expectations. Shares have gained 9% over the past year.

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