Head-To-Head Review: Advantage Solutions (NASDAQ:ADV) vs. Magnite (NASDAQ:MGNI)

Magnite (NASDAQ:MGNI) and Advantage Solutions (NASDAQ:ADV) are both communication services companies, but which is the superior investment? We will contrast the two businesses based on the strength of their earnings, institutional ownership, profitability, valuation, risk, dividends and analyst recommendations.

Insider & Institutional Ownership

73.4% of Magnite shares are owned by institutional investors. Comparatively, 49.8% of Advantage Solutions shares are owned by institutional investors. 3.2% of Magnite shares are owned by company insiders. Comparatively, 9.7% of Advantage Solutions shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Profitability

This table compares Magnite and Advantage Solutions’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Magnite	22.49%	9.33%	2.77%
Advantage Solutions	-7.65%	-48.15%	-9.47%

Valuation & Earnings

This table compares Magnite and Advantage Solutions”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Magnite	$713.95 million	4.83	$144.61 million	$1.09	22.07
Advantage Solutions	$3.54 billion	0.12	-$227.74 million	($21.34)	-1.57

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

Risk and Volatility

Magnite has a beta of 2.3, indicating that its share price is 130% more volatile than the S&P 500. Comparatively, Advantage Solutions has a beta of 2.16, indicating that its share price is 116% more volatile than the S&P 500.

Analyst Recommendations

This is a summary of current recommendations for Magnite and Advantage Solutions, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Magnite	0	2	10	0	2.83
Advantage Solutions	2	1	1	0	1.75

Magnite presently has a consensus price target of $29.36, indicating a potential upside of 22.04%. Advantage Solutions has a consensus price target of $42.00, indicating a potential upside of 25.22%. Given Advantage Solutions’ higher probable upside, analysts clearly believe Advantage Solutions is more favorable than Magnite.

Summary

Magnite beats Advantage Solutions on 11 of the 14 factors compared between the two stocks.

About Magnite

Magnite, Inc., together with its subsidiaries, operates an independent omni-channel sell-side advertising platform in the United States and internationally. The company’s platform offers applications and services for sellers of digital advertising inventory or publishers that own and operate CTV channels, applications, websites, and other digital media properties to manage and monetize their inventory; and applications and services for buyers, including advertisers, agencies, agency trading desks, and demand side platforms to buy digital advertising inventory, as well as an independent marketplace that connects buyers and sellers. It markets its solutions through 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 New York, New York.

About Advantage Solutions

Advantage Solutions Inc. provides business solutions to consumer goods manufacturers and retailers in North America and internationally. It operates in two segments, Sales and Marketing. The Sales segment offers brand-centric services, such as headquarter relationship management; analytics, insights, and intelligence; and brand-centric merchandising services. This segment also provides retailer-centric services comprising retailer-centric merchandising and in-store media services. The Marketing segment offers brand-centric services, including shopper and consumer marketing, and brand experiential services; retailer-centric services, such as retail experiential and private label services; and digital marketing, and digital media and advertising services. The company was formerly known as Karman Holding Corp. and changed its name to Advantage Solutions Inc. in March 2016. The company was founded in 1987 and is headquartered in Irvine, California.