PubMatic (PUBM) AI Stock Analysis

• Market Cap: $382.28M
• Dividend Yield: N/A
• Average Volume (3M): 601.74K
• Price to Earnings (P/E): ―
• Beta (1Y): 1.42
• Revenue Growth: 3.53%
• EPS Growth: -109.03%
• Country: US
• Employees: 1,049
• Sector: Technology
• Sector Strength: 88
• Industry: Software - Application
• EPS (TTM): -0.11
• Shares Outstanding: 37,459,793
• 10 Day Avg. Volume: 532,949
• 30 Day Avg. Volume: 601,735
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• Enterprise Value/Market Cap: 1.35
• Enterprise Value/Revenue: 1.76
• Enterprise Value/Gross Profit: 2.72
• Enterprise Value/Ebitda: 16.60
• 1Y Price Target: $11.17
• Price Target Upside: 33.61% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 12

• Rating: 66 Neutral
• Price Target: $9.00 ▲(7.66% Upside)

PubMatic's overall stock score reflects a balanced view of its strengths and challenges. The company's robust cash flow and strategic focus on high-growth areas like CTV and AI integration are significant positives. However, profitability issues and valuation challenges weigh on the score. The earnings call provides optimism for future growth, but technical indicators suggest a neutral market sentiment. Addressing profitability and valuation concerns will be crucial for improving the stock's attractiveness.

Positive Factors

Strategic Partnership

The partnership with MNTN expands access to premium CTV advertising, enhancing PubMatic's market position and driving sustainable revenue growth.

CTV Revenue Growth

Strong CTV revenue growth signifies successful expansion into high-growth areas, supporting long-term revenue diversification and market competitiveness.

AI Integration

AI integration enhances operational efficiency and campaign performance, positioning PubMatic for improved decision-making and competitive advantage.

Negative Factors

Profitability Challenges

Recent profitability downturns, indicated by negative margins, could strain financial resources and limit growth investments if not addressed.

DSP Platform Changes

Changes in DSP platforms pose risks to revenue stability, highlighting the need for diversification to mitigate dependency on key partners.

Concentration Risk

High concentration risk with top DSPs could lead to significant revenue volatility, necessitating strategic diversification to ensure stability.

PubMatic Business Overview & Revenue Model

Company Description

PubMatic, Inc. provides a cloud infrastructure platform that enables real-time programmatic advertising transactions for Internet content creators and advertisers worldwide. The company's solutions include Openwrap, a header bidding solution that provides enterprise-grade management and analytics tools; Openwrap OTT, a header bidding management solution for OTT; Openwrap SDK, a header bidding solution for in-app developers; private marketplace solutions; and media buyer consoles. In addition, it offers Real-Time Bidding (RTB) programmatic technologies, which provides various selling options across screens and ad formats; digital advertising inventory quality solutions to detect and filter out invalid traffic and other nefarious activity; Ad quality solutions targeting the reduction of security issues, quality issues, and performance issues; Identity Hub, an identity solution that allows for the use of any advertiser preferred user identifier in a scaled and privacy-compliant fashion; Audience Encore, an audience data platform; and cross-platform video, a sell side platform, which connects trusted video buyers to premium publishers. The company's platform supports an array of ad formats and digital device types, including mobile app, mobile web, desktop, display, video, over-the-top (OTT), connected television, and media. PubMatic, Inc. was incorporated in 2006 and is based in Redwood City, California.

How the Company Makes Money

PubMatic generates revenue primarily through its programmatic advertising platform, which operates on a cost-per-impression (CPM) model. The company earns money by charging advertisers for each ad impression served through its platform, while also taking a percentage of the revenue generated by publishers when their inventory is sold. Key revenue streams include the sale of ad space to advertisers, fees for data analytics services, and additional premium features offered to both publishers and advertisers. Significant partnerships with major advertising agencies and brands enhance its market reach and contribute to its earnings, as they leverage PubMatic's technology to optimize their digital advertising strategies.

PubMatic Financial Statement Overview

Summary

PubMatic exhibits a mixed financial performance with strong cash flow and a solid balance sheet, but faces challenges in profitability as indicated by the income statement. The company has shown resilience in revenue growth, but recent declines in profit margins and return on equity need to be addressed. Maintaining strong cash flow and a conservative leverage position provides a stable foundation for addressing these challenges and pursuing growth opportunities.

Income Statement

PubMatic's income statement shows a mixed performance. The TTM data indicates a slight revenue growth of 1.33%, but the company is currently experiencing a negative net profit margin of -0.58%, reflecting a recent downturn in profitability. Historical data shows a decline in gross profit margin from 74.3% in 2021 to 64.9% in TTM, indicating pressure on cost management. The EBIT margin has also turned negative, suggesting operational challenges. However, the company has demonstrated resilience in revenue growth over the years, which is a positive sign.

Balance Sheet

The balance sheet of PubMatic is relatively strong, with a low debt-to-equity ratio of 0.19 in TTM, indicating a conservative leverage position. However, the return on equity has turned negative in TTM, reflecting recent profitability challenges. The equity ratio remains stable, suggesting a solid capital structure. Overall, the company maintains a healthy balance sheet with manageable debt levels, but recent profitability issues need attention.

Cash Flow

PubMatic's cash flow statement shows robust free cash flow growth of 52.18% in TTM, indicating strong cash generation capabilities. The operating cash flow to net income ratio is healthy, suggesting efficient cash conversion. The free cash flow to net income ratio of 0.58 in TTM highlights the company's ability to generate cash relative to its earnings, despite recent net income challenges. Overall, the cash flow position is strong, supporting future investments and operations.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	292.21M	291.26M	267.01M	256.38M	226.91M	148.75M
Gross Profit	189.56M	190.23M	167.78M	174.87M	168.59M	107.56M
EBITDA	31.03M	49.28M	46.81M	77.55M	74.46M	47.50M
Net Income	-1.71M	12.50M	8.88M	28.70M	56.60M	26.61M
Balance Sheet
Total Assets	675.22M	739.52M	695.24M	642.17M	550.22M	371.25M
Cash, Cash Equivalents and Short-Term Investments	117.56M	140.59M	175.34M	174.40M	159.63M	100.98M
Total Debt	45.66M	45.38M	21.84M	26.59M	21.71M	1.56M
Total Liabilities	431.94M	462.26M	399.04M	329.99M	293.04M	195.82M
Stockholders Equity	243.28M	277.26M	296.20M	312.19M	257.18M	175.43M
Cash Flow
Free Cash Flow	28.29M	55.83M	52.83M	38.32M	49.32M	-7.07M
Operating Cash Flow	67.71M	73.42M	81.12M	87.21M	88.68M	24.33M
Investing Cash Flow	28.06M	22.31M	-39.02M	-81.37M	-96.72M	-29.88M
Financing Cash Flow	-79.31M	-73.48M	-55.98M	4.04M	9.36M	52.48M

PubMatic Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 8.36
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For PUBM, the sentiment is Negative. The current price of 8.36 is below the 20-day moving average (MA) of 8.39, below the 50-day MA of 8.43, and below the 200-day MA of 10.79, indicating a bearish trend. The MACD of -0.01 indicates Negative momentum. The RSI at 47.70 is Neutral, neither overbought nor oversold. The STOCH value of 32.31 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for PUBM.

PubMatic Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
PUBM	―	$382.28M	―	-0.65%	―	3.53%	-109.03%
Sector *	―	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
DSP	―	$537.60M	254.17	5.20%	―	30.92%	―
CMRC	―	$373.80M	―	-55.85%	―	4.06%	57.50%
ONTF	―	$231.42M	―	-22.60%	―	-6.88%	15.83%
API	―	$328.22M	―	-3.84%	―	-3.60%	48.15%
SMRT	―	$261.42M	―	-25.48%	―	-28.45%	-224.48%

PubMatic Corporate Events

PubMatic Files Lawsuit Against Google for Antitrust Violations

On September 8, 2025, PubMatic filed a lawsuit against Google in the U.S. District Court for the Eastern District of Virginia, seeking financial damages and injunctive relief for Google’s alleged monopolistic and anticompetitive behavior in the publisher ad server and ad exchange markets. This legal action follows an April 2025 ruling against Google by the U.S. Department of Justice, which found Google engaged in anticompetitive practices. The lawsuit aims to hold Google accountable and restore fair competition in the digital advertising industry, but it also presents risks for PubMatic, including potential retaliatory actions by Google that could impact PubMatic’s operations and financial condition.

The most recent analyst rating on (PUBM) stock is a Buy with a $17.00 price target. To see the full list of analyst forecasts on PubMatic stock, see the PUBM Stock Forecast page.

PubMatic’s Earnings Call: Growth Amid Challenges

PubMatic Inc’s recent earnings call presented a mixed sentiment, reflecting both promising opportunities and notable challenges. The company reported strong growth in emerging revenue streams and Connected TV (CTV), alongside successful AI integration for operational improvements. However, these positives were tempered by challenges such as changes in demand-side platform (DSP) operations, stagnant display revenue, and broader macroeconomic uncertainties.

PubMatic Reports Strong Q2 2025 Financial Results

PubMatic, Inc. is an independent technology company that operates within the digital advertising sector, focusing on optimizing the supply chain for digital advertising. The company provides a platform that empowers publishers and ad buyers to enhance performance, control, and transparency across various ad formats and devices.