Facebook (NASDAQ:FB) & Magnite (NASDAQ:MGNI) Critical Review

Facebook (NASDAQ:FB) and Magnite (NASDAQ:MGNI) are both computer and technology companies, but which is the better stock? We will contrast the two businesses based on the strength of their profitability, valuation, earnings, dividends, risk, analyst recommendations and institutional ownership.

Profitability

This table compares Facebook and Magnite’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Facebook 32.00% 23.27% 18.12%
Magnite -30.72% -9.19% -3.64%

Earnings and Valuation

This table compares Facebook and Magnite’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Facebook $70.70 billion 12.21 $18.49 billion $6.43 47.13
Magnite $156.41 million 29.75 -$25.48 million ($0.37) -108.81

Facebook has higher revenue and earnings than Magnite. Magnite is trading at a lower price-to-earnings ratio than Facebook, indicating that it is currently the more affordable of the two stocks.

Volatility & Risk

Facebook has a beta of 1.18, indicating that its share price is 18% more volatile than the S&P 500. Comparatively, Magnite has a beta of 2.45, indicating that its share price is 145% more volatile than the S&P 500.

Insider & Institutional Ownership

65.0% of Facebook shares are held by institutional investors. Comparatively, 74.3% of Magnite shares are held by institutional investors. 14.1% of Facebook shares are held by insiders. Comparatively, 5.7% of Magnite shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for Facebook and Magnite, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Facebook 1 5 36 1 2.86
Magnite 0 3 4 0 2.57

Facebook presently has a consensus target price of $329.59, suggesting a potential upside of 8.76%. Magnite has a consensus target price of $40.29, suggesting a potential upside of 0.06%. Given Facebook’s stronger consensus rating and higher possible upside, equities analysts clearly believe Facebook is more favorable than Magnite.

Summary

Facebook beats Magnite on 12 of the 15 factors compared between the two stocks.

About Facebook

Facebook, Inc. develops products that enable people to connect and share with friends and family through mobile devices, personal computers, virtual reality headsets, and in-home devices worldwide. The company's products include Facebook that enables people to connect, share, discover, and communicate with each other on mobile devices and personal computers; Instagram, a community for sharing photos, videos, and private messages; Messenger, a messaging application for people to connect with friends, family, groups, and businesses across platforms and devices; and WhatsApp, a messaging application that is used by people and businesses to communicate in a private way. It also provides Facebook Reality Labs, an augmented and virtual reality product that help people feel connected, anytime, and anywhere. Facebook, Inc. was founded in 2004 and is headquartered in Menlo Park, California.

About Magnite

Magnite, Inc. operates an independent sell-side advertising platform in the United States and internationally. The company's advertising platform enables publishers to monetize various screens and formats, including CTV, desktop display, video, audio, and mobile, as well as allows agencies and brands to access brand-safe ad inventory and execute advertising transactions. It markets its technology solutions to buyers and sellers through a sales teams that operate from various locations. The company was formerly known as The Rubicon Project, Inc. and changed name to Magnite, Inc. in July 2020. Magnite, Inc. was incorporated in 2007 and is headquartered in Los Angeles, California.

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