As of May 23, 2025, Magnite Inc's estimated intrinsic value ranges from $0.46 to $9.20 per share, depending on the valuation methodology applied.
| Valuation Method | Fair Value (USD) | Implied Upside/Downside |
|---|---|---|
| Discounted Cash Flow (10Y) | $9.05 | -42.0% |
| Discounted Cash Flow (5Y) | $0.46 | -97.0% |
| Dividend Discount Model (Multi-Stage) | $9.20 | -41.0% |
| Dividend Discount Model (Stable) | $3.56 | -77.2% |
| Earnings Power Value | $5.19 | -66.7% |
Is Magnite Inc (MGNI) undervalued or overvalued?
With the current market price at $15.60, the stock appears to be significantly overvalued.
Intrinsic value represents the "true" worth of a company based on its fundamentals rather than market sentiment. We've employed multiple methodologies to triangulate Magnite Inc's intrinsic value, including:
The cost of capital is a critical factor in valuation models, representing the required return for investors.
| WACC Component | Low | High |
|---|---|---|
| Long-term bond rate | 3.9% | 4.4% |
| Equity market risk premium | 4.6% | 5.6% |
| Adjusted beta | 0.8 | 1.07 |
| Cost of equity | 7.6% | 10.8% |
| Cost of debt | 9.1% | 9.1% |
| Tax rate | 2.9% | 7.9% |
| Debt/Equity ratio | 0.25 | 0.25 |
| After-tax WACC | 7.8% | 10.3% |
Our DCF model projects cash flows over 5-year and 10-year horizons, with the following key assumptions:
| DCF Model | Fair Value | Enterprise Value | % from Terminal Value |
|---|---|---|---|
| 5-Year Growth | $0 | $136M | 301.8% |
| 10-Year Growth | $9 | $1,351M | 94.9% |
| 5-Year EBITDA | $12 | $1,787M | 115.3% |
| 10-Year EBITDA | $18 | $2,669M | 97.4% |
The DDM values a company based on its expected future dividend payments. We used two approaches:
EPV assesses a company's value based on its current normalized earnings power, assuming no growth.
| EPV Component | Value |
|---|---|
| Normalized Earnings | $72M |
| Discount Rate (WACC) | 10.3% - 7.8% |
| Enterprise Value | $692M - $916M |
| Net Debt | $71M |
| Equity Value | $622M - $846M |
| Outstanding Shares | 141M |
| Fair Value | $4 - $6 |
| Selected Fair Value | $5.19 |
| Metric | Value |
|---|---|
| Market Capitalization | $2206M |
| Enterprise Value | $2276M |
| Trailing P/E | 96.79 |
| Forward P/E | 56.78 |
| Trailing EV/EBITDA | 16.10 |
| Current Dividend Yield | 0.00% |
| Dividend Growth Rate (5Y) | 0.00% |
| Debt-to-Equity Ratio | 0.25 |
To determine the most reliable intrinsic value estimate, we weigh each valuation method based on:
| Valuation Method | Weight | Weighted Value |
|---|---|---|
| Discounted Cash Flow (10Y) | 30% | $2.72 |
| Discounted Cash Flow (5Y) | 25% | $0.12 |
| Dividend Discount Model (Multi-Stage) | 20% | $1.84 |
| Dividend Discount Model (Stable) | 15% | $0.53 |
| Earnings Power Value | 10% | $0.52 |
| Weighted Average | 100% | $5.72 |
Based on our comprehensive valuation analysis, Magnite Inc's weighted average intrinsic value is $5.72, which is approximately 63.3% below the current market price of $15.60.
Key investment considerations:
Given these factors, we believe Magnite Inc is currently significantly overvalued with the potential for long-term appreciation based on the company's growth trajectory and financial strength.