What Happened?
Shares of digital advertising platform Magnite (NASDAQ: MGNI) fell 14.5% in the afternoon session after disappointing fourth-quarter results from industry bellwether Gartner sparked widespread concerns about a slowdown in the sector.
The research and advisory firm reported that revenue in its Consulting segment fell 12.8%. This weak performance from a major industry player appeared to validate broader market fears about the health of the IT services and consulting industry. The negative sentiment spread quickly, with shares of other major companies like Accenture and Intuit also falling sharply. The market now seems concerned about a potential slowdown in the sector's growth rate, compounded by uncertainty over the long-term impact of artificial intelligence on existing business models.
The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks. Is now the time to buy Magnite? Access our full analysis report here, it’s free.
What Is The Market Telling Us
Magnite’s shares are extremely volatile and have had 34 moves greater than 5% over the last year. But moves this big are rare even for Magnite and indicate this news significantly impacted the market’s perception of the business.
The biggest move we wrote about over the last year was 3 months ago when the stock dropped 18.5% on the news that the company reported underwhelming earnings. The company announced revenue of $179.5 million, up 10.8% year-on-year and slightly ahead of the $178 million consensus. Adjusted earnings per share came in at $0.20, matching analyst expectations. Magnite also delivered a strong adjusted EBITDA of $57.17 million, beating estimates by 7.7%, and saw its operating margin improve significantly to 14% from 9.3% in the same quarter last year. Despite these solid operational results, the sharp decline in the share price suggests investors may be reacting to factors beyond the headline numbers presented in the earnings release.
Magnite is down 26.4% since the beginning of the year, and at $11.82 per share, it is trading 55.4% below its 52-week high of $26.52 from August 2025. Investors who bought $1,000 worth of Magnite’s shares 5 years ago would now be looking at an investment worth $286.31.
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