Magnite, Inc. (NASDAQ:MGNI) is a prominent player in the digital advertising technology sector. It provides a platform for publishers to monetize their content through programmatic advertising. Magnite's main competitors include companies like PubMatic, Inc. (PUBM), Digital Turbine, Inc. (APPS), Fulgent Genetics, Inc. (FLGT), fuboTV Inc. (FUBO), and Fiverr International Ltd. (FVRR). These companies operate in various niches within the tech and digital advertising space.
In evaluating Magnite's financial efficiency, the Return on Invested Capital (ROIC) is a key metric. Magnite's ROIC stands at 3.19%, which is higher than its closest peer, PubMatic, which has a ROIC of 0.85%. This suggests that Magnite is more effective in generating returns from its invested capital compared to PubMatic. However, both companies face a challenge as their ROICs are below their respective Weighted Average Cost of Capital (WACC).
Magnite's WACC is 17.67%, which is significantly higher than its ROIC, resulting in a ROIC to WACC ratio of 0.18. This indicates that while Magnite is generating returns, they are not sufficient to cover the cost of capital. Despite this, Magnite's ratio is the highest among its peers, suggesting it is relatively more efficient in managing its capital costs.
In contrast, Digital Turbine, Inc. (APPS) has a negative ROIC of -10.77% against a WACC of 11.19%, leading to a ROIC to WACC ratio of -0.96. This negative ratio indicates that Digital Turbine is not generating enough returns to cover its cost of capital, highlighting inefficiencies in its capital management. Similarly, Fulgent Genetics, fuboTV, and Fiverr International also have negative ROIC to WACC ratios, indicating challenges in generating sufficient returns over their capital costs.
