PubMatic, Inc.

Key Points
PubMatic stock fell 33.7%, despite beating second-quarter earnings and revenue expectations.
Video-advertising revenue jumped 34%, with connected TV ads growing 50% year over year.
The stock fell to an all-time low.
Shares of PubMatic (NASDAQ: PUBM) took a swan dive on Tuesday morning, starting the morning session 33.7% below Monday's closing price. The company reported second-quarter earnings last night with strong results but uninspiring forward guidance.
The stock had recovered to a 19.4% drop by 12:50 p.m. ET, but that's still a painful price cut.
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Beating estimates isn't always enough for Wall Street
The digital-advertising expert saw second-quarter sales rise 6% year over year to $71.1 million. Omnichannel video revenue jumped 34% higher, led by a 50% increase in video ads for connected TVs (CTV). The adjusted bottom line swung from a $0.10 net loss to a $0.05 profit per diluted share.
The average analyst would have settled for a $0.16 net loss per share on sales near $67.8 million. The results also exceeded PubMatic's guidance targets across the board.
However, the stock plummeted anyway due to a modest view of the upcoming quarter. The midpoint of management's guidance range points to a 4% year-over-year revenue drop and weaker adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA).
PubMatic might be sandbagging its guidance again
On theearnings call PubMatic CEO Rajeev Goel said that the digital-advertising market is changing, as is PubMatic's strategy. The company is diversifying its customer list -- a necessary step after losing a significant amount of business from a large but unnamed client in the second quarter. It's also exploring ways to use artificial intelligence (AI) in the creation and management of online ad campaigns.
Investors hated the muted third-quarter outlook, but PubMatic is in the habit of setting up low guidance targets, only to knock them down with authority. Is this report's soft Q3 guidance another example of this tactic? CFO Steve Pantelick's remarks point in that direction, as he presented the targets as "a conservative approach."
PubMatic's stock dropped to an all-time low today. Some would call it a falling knife, but I see it as a tempting buy right now.
Should you invest $1,000 in PubMatic right now?
Before you buy stock in PubMatic, consider this:
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Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $653,427!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,119,863!*
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Anders Bylund has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends PubMatic. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Why PubMatic Stock Fell 33.7% This Morning

Looking at options trading activity among components of the Russell 3000 index, there is noteworthy activity today in Unifirst Corp (Symbol: UNF), where a total volume of 768 contracts has been traded thus far today, a contract volume which is representative of approximately 76,800 underlying shares (given that every 1 contract represents 100 underlying shares). That number works out to 60.4% of UNF's average daily trading volume over the past month, of 127,120 shares. Especially high volume was seen for the $145 strike call option expiring July 18, 2025, with 750 contracts trading so far today, representing approximately 75,000 underlying shares of UNF. Below is a chart showing UNF's trailing twelve month trading history, with the $145 strike highlighted in orange:
Blackstone Inc (Symbol: BX) saw options trading volume of 20,565 contracts, representing approximately 2.1 million underlying shares or approximately 58.7% of BX's average daily trading volume over the past month, of 3.5 million shares. Particularly high volume was seen for the $135 strike put option expiring July 11, 2025, with 4,496 contracts trading so far today, representing approximately 449,600 underlying shares of BX. Below is a chart showing BX's trailing twelve month trading history, with the $135 strike highlighted in orange:
And PubMatic Inc (Symbol: PUBM) options are showing a volume of 3,519 contracts thus far today. That number of contracts represents approximately 351,900 underlying shares, working out to a sizeable 58.1% of PUBM's average daily trading volume over the past month, of 606,150 shares. Particularly high volume was seen for the $17.50 strike call option expiring October 17, 2025, with 1,515 contracts trading so far today, representing approximately 151,500 underlying shares of PUBM. Below is a chart showing PUBM's trailing twelve month trading history, with the $17.50 strike highlighted in orange:
For the various different available expirations for UNF options, BX options, or PUBM options, visit StockOptionsChannel.com.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Notable Monday Option Activity: UNF, BX, PUBM

In trading on Monday, computers shares were relative leaders, up on the day by about 2.4%. Leading the group were shares of Astronova, up about 19.2% and shares of Hewlett Packard Enterprise up about 13% on the day.
Also showing relative strength are advertising shares, up on the day by about 1.5% as a group, led by Magnite, trading up by about 14.2% and Pubmatic, trading higher by about 10.3% on Monday.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Monday Sector Leaders: Computers, Advertising Stocks

Of course, stocks aren't as cheap as they were a few months ago when the S&P 500 index briefly plunged into bear market territory. But there are still some bargains in the stock market, and I managed to find places to put money to work. In this video, I'll share all seven stocks I've bought this month, including one that is a brand-new addition to my portfolio.
*Stock prices used were the morning prices of June 19, 2025. The video was published on June 20, 2025.
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Matt Frankel has positions in Dream Finders Homes, General Motors, Howard Hughes, PubMatic, Realty Income, Vanguard Russell 2000 ETF, and Walker & Dunlop. The Motley Fool has positions in and recommends Dream Finders Homes, Howard Hughes, PubMatic, Realty Income, and Walker & Dunlop. The Motley Fool recommends General Motors. The Motley Fool has a disclosure policy.
Matthew Frankel is an affiliate of The Motley Fool and may be compensated for promoting its services. If you choose to subscribe through their link they will earn some extra money that supports their channel. Their opinions remain their own and are unaffected by The Motley Fool.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Here Are All 7 Stocks I've Bought in June

Nike's Turnaround Story

Shares of programmatic advertising platform PubMatic (NASDAQ: PUBM) have been pummeled over the past few years. The stock surged in the early days of the pandemic, but it's lost more than 80% of its value since peaking in 2021.
On the surface, PubMatic's first-quarter report wasn't anything to write home about. Revenue sank 4% year over year, the company reported a GAAP net loss, and the outlook for the second quarter wasn't particularly impressive. But there's a lot to like about the company, and the stock looks like a solid bargain.
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Growth is better than it looks
PubMatic's revenue growth was affected by two things in the first quarter. A demand-side platform buyer changed its auction methodology in 2024, reducing revenue from that buyer. That change won't be lapped until mid-2025. The decline in political advertising from an election year in 2024 knocked down revenue as well. The 70% of PubMatic's revenue that wasn't touched by those two factors jumped by 21% year over year in the first quarter. That compares to 16% growth in the fourth quarter of 2024.
The number of ad impressions processed by PubMatic's platforms continues to grow at a healthy rate. In the 12-month period ending with Q1 2025, PubMatic processed 280 trillion ad impressions, up 27% year over year. Certain areas are also performing well for the company. Omnichannel video revenue rose by 20% in Q1, connected TV revenue soared by 50%, and revenue from emerging categories more than doubled.
While PubMatic's overall revenue may not grow much in 2025, revenue excluding those two temporary headwinds is expected to grow by at least 15%, with overall revenue growth accelerating in the second half of the year. Helping the cause is the company's new AI-powered media buying platform, which was launched last week. The new platform helps make the ad buying process simpler and more efficient, and it has shown good results for buyers in beta testing.
Keeping costs in check
PubMatic owns and operates its own infrastructure. Instead of paying a third-party cloud computing provider based on usage, the company can tune capital spending to match expected demand and unlock efficiencies that drive down per-impression costs. Over the past two years, PubMatic's cost of revenue has risen just 16% despite a 60% jump in ad impressions. Over the past 12 months, the company's cost of revenue per million impressions has dropped by 20%.
PubMatic plans to spend around $15 million on capital expenditures in 2025, a 15% reduction compared to its previous outlook. Pulling back on capital spending frees up cash for other users, including an additional $100 million for share buybacks, and it can help push up infrastructure utilization rates and drive down per-impression costs further.
While PubMatic posted a GAAP net loss for Q1, free cash flow remained positive. Over the five-year period ending in the first quarter of 2025, the company has averaged about $37 million in free cash flow annually.
An attractive valuation
While PubMatic's profitability metrics are under pressure right now, the stock looks like a solid buy based on the average annual free cash flow generation over the past five years. With a market capitalization of around $580 million, the stock trades for roughly 16 times that free cash flow figure.
Given PubMatic's long-term growth prospects and its underlying revenue growth right now, that valuation looks reasonable. If you factor in a cash-rich and debt-free balance sheet, the situation looks even better. The company ended Q1 with $144.1 million in cash and securities, giving it plenty of ammunition for share buybacks and flexibility to make growth investments or ramp up capital spending as needed to meet demand.
While an economic slowdown could hit the advertising industry and hurt PubMatic's revenue this year, the company's results are better than they appear, and the stock looks like a great buy.
Should you invest $1,000 in PubMatic right now?
Before you buy stock in PubMatic, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and PubMatic wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $614,911!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $714,958!*
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*Stock Advisor returns as of May 12, 2025
Timothy Green has positions in PubMatic. The Motley Fool has positions in and recommends PubMatic. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

This AdTech Stock Looks Like a Solid Buy

Looking at options trading activity among components of the Russell 3000 index, there is noteworthy activity today in PubMatic Inc (Symbol: PUBM), where a total volume of 2,920 contracts has been traded thus far today, a contract volume which is representative of approximately 292,000 underlying shares (given that every 1 contract represents 100 underlying shares). That number works out to 49.3% of PUBM's average daily trading volume over the past month, of 592,535 shares. Especially high volume was seen for the $12.50 strike call option expiring June 20, 2025, with 1,722 contracts trading so far today, representing approximately 172,200 underlying shares of PUBM. Below is a chart showing PUBM's trailing twelve month trading history, with the $12.50 strike highlighted in orange:
Applied Optoelectronics Inc (Symbol: AAOI) saw options trading volume of 13,998 contracts, representing approximately 1.4 million underlying shares or approximately 46.7% of AAOI's average daily trading volume over the past month, of 3.0 million shares. Particularly high volume was seen for the $15 strike call option expiring May 09, 2025, with 2,191 contracts trading so far today, representing approximately 219,100 underlying shares of AAOI. Below is a chart showing AAOI's trailing twelve month trading history, with the $15 strike highlighted in orange:
And MP Materials Corp (Symbol: MP) options are showing a volume of 41,525 contracts thus far today. That number of contracts represents approximately 4.2 million underlying shares, working out to a sizeable 46.4% of MP's average daily trading volume over the past month, of 9.0 million shares. Especially high volume was seen for the $23 strike put option expiring May 16, 2025, with 6,332 contracts trading so far today, representing approximately 633,200 underlying shares of MP. Below is a chart showing MP's trailing twelve month trading history, with the $23 strike highlighted in orange:
For the various different available expirations for PUBM options, AAOI options, or MP options, visit StockOptionsChannel.com.
Today's Most Active Call & Put Options of the S&P 500 »
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Notable Friday Option Activity: PUBM, AAOI, MP

Reddit Inc. (RDDT) came out with quarterly earnings of $0.13 per share, beating the Zacks Consensus Estimate of $0.02 per share. This compares to earnings of $0.29 per share a year ago. These figures are adjusted for non-recurring items.
This quarterly report represents an earnings surprise of 550%. A quarter ago, it was expected that this company would post earnings of $0.25 per share when it actually produced earnings of $0.36, delivering a surprise of 44%.
Over the last four quarters, the company has surpassed consensus EPS estimates four times.
Reddit Inc., which belongs to the Zacks Internet - Software industry, posted revenues of $392.36 million for the quarter ended March 2025, surpassing the Zacks Consensus Estimate by 5.45%. This compares to year-ago revenues of $242.96 million. The company has topped consensus revenue estimates four times over the last four quarters.
The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call.
Reddit Inc. Shares have lost about 28.7% since the beginning of the year versus the S&P 500's decline of -5.3%.
What's Next for Reddit Inc.
While Reddit Inc. Has underperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock?
There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately.
Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions.
Ahead of this earnings release, the estimate revisions trend for Reddit Inc. Unfavorable. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #5 (Strong Sell) for the stock. So, the shares are expected to underperform the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
It will be interesting to see how estimates for the coming quarters and current fiscal year change in the days ahead. The current consensus EPS estimate is $0.09 on $391.15 million in revenues for the coming quarter and $0.97 on $1.76 billion in revenues for the current fiscal year.
Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Internet - Software is currently in the bottom 43% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1.
One other stock from the same industry, PubMatic, Inc. (PUBM), is yet to report results for the quarter ended March 2025. The results are expected to be released on May 8.
This company is expected to post quarterly loss of $0.05 per share in its upcoming report, which represents no change from the year-ago quarter. The consensus EPS estimate for the quarter has remained unchanged over the last 30 days.
PubMatic, Inc.'s revenues are expected to be $62.15 million, down 6.8% from the year-ago quarter.
Should You Invest in Reddit Inc. (RDDT)?
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Zacks Investment Research has been committed to providing investors with tools and independent research since 1978. For more than a quarter century, the Zacks Rank stock-rating system has more than doubled the S&P 500 with an average gain of +24.08% per year. (These returns cover a period from January 1, 1988 through May 6, 2024.)
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This article originally published on Zacks Investment Research (zacks.com).
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Reddit Inc. (RDDT) Tops Q1 Earnings and Revenue Estimates

The old idiom "blink, and you'll miss it" might be the best descriptor of the historic volatility we've witnessed on Wall Street over the trailing week, as of this writing on April 9.
The two trading days that closed out the previous week (April 3 and April 4) were some of the roughest on record for optimists. The benchmark S&P 500 lost 10.5% of its value in two days, which is its fifth-biggest two-day downdraft in 75 years! As for the Dow Jones Industrial Average, it neared a 4,600-point pullback spanning four sessions (April 3 through April 8).
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On Wednesday, April 9, President Donald Trump temporarily reversed course on his tariff policies that were roiling the stock market and lowered tariffs to a flat 10% for most countries over the next 90 days (China not included). April 9 marked the largest single-session point increases for the Dow Jones Industrial Average (2,963 points), S&P 500 (474 points), and Nasdaq Composite (1,857 points), in their respective histories.
Although the stock market remains historically pricey, based on the S&P 500's Shiller price-to-earnings (P/E) Ratio, some price dislocations have emerged amid the tumult on Wall Street. While I'm still sitting on quite a bit of cash in anticipation of the broader market becoming more fundamentally attractive, the historic volatility we've navigated our way through over the previous week allowed me to purchase six stocks with very clear price dislocations.
1. Pfizer
The first sensational stock I scooped up that appears to be mispriced by Wall Street is pharmaceutical goliath Pfizer (NYSE: PFE). Though there's concern about the possibility of tariffs being put into place on pharmaceuticals, this looks to be an overblown worry for a historically cheap company that was nearing a sustainable 8% dividend yield earlier this week.
Pfizer has been getting a bad rap on Wall Street because its two core COVID-19 therapies -- its Comirnaty vaccine and Paxlovid oral therapy for patients who have the virus -- saw sales plunge from a peak of more than $56 billion in 2022 to roughly $11 billion last year.
But keep in mind that Pfizer wasn't generating any COVID-19 drug sales when this decade began and brought in $11 billion last year. In a four-year stretch (2020-2024), Pfizer's net sales jumped 52% to $63.6 billion. It's unquestionably become a stronger company, but hasn't been rewarded for it.
There's a good likelihood Pfizer's acquisition of cancer-drug developer Seagen will begin to pay benefits this year, as well. With acquisition-related expenses in the rearview mirror, Seagen's pipeline, and the cost-savings associated with this merger, should become apparent in Pfizer's bottom line and long-term growth forecast.
A forward P/E ratio of just above 7 is nothing short of a steal for Pfizer stock.
2. Sirius XM Holdings
Satellite-radio operator, and Warren Buffett favorite, Sirius XM Holdings (NASDAQ: SIRI) is another stock with an apparent price dislocation that I've been gladly purchasing. Despite near-term worry about a U.S. recession, which would likely hurt auto sales and slow/stall Sirius XM's self-pay subscriber growth, the company's well-defined competitive advantages tell the long-term story.
The obvious edge for Sirius XM is that it's the only licensed satellite-radio operator. I don't want to give the impression that it's devoid of competition for listeners, but being the only satellite-radio company does afford it a level of pricing power that most radio operators can't match.
But even more important than its status as a legal monopoly is its revenue diversity. Whereas traditional radio companies rely almost exclusively on advertising to keep the lights on, Sirius XM brought in just 20% of its net sales from ads last year. The bulk (76%) of its net sales are the result of recurring subscriptions. If the U.S. economy weakens, Sirius XM's operating cash flow tends to be more predictable than companies reliant on advertising revenue.
The valuation is also too enticing to ignore, which likely what keeps bringing Buffett back for more. Earlier this week, shares of Sirius XM could be had for a multiple of 6 times forward earnings, which is its lowest forward P/E since going public in 1994. To boot, patient investors will receive a 5.2% annual yield.
3. Intel
There's not much I love more than a time-tested stock with a track record of success that Wall Street absolutely despises. Though I'm not oblivious to the challenges that lie ahead for semiconductor stock Intel (NASDAQ: INTC), its shares trading well below book value, and near tangible book value earlier this week, represented the perfect entry point.
For all the concern about Advanced Micro Devices eating Intel's legacy central processing unit (CPU) share for lunch, Intel is still the dominant player when it comes to CPUs used in laptops and desktops. CPUs may not be the growth story they were two decades ago, but they can still generate ample operating cash flow for Intel.
There's also the recent hire of Lip-Bu Tan as the company's new CEO. Tan, who held the CEO position at Cadence Design Systems for 12 years (2009-2021), has more than two decades of semiconductor industry and software experience. Importantly, he's not afraid to simplify Intel's operations by selling off non-core assets. When coupled with ongoing cost-cutting, Intel should exhibit improved margins beginning this year.
Lastly, keep in mind that every next-big-thing innovation for over three decades has endured a bubble-bursting event. Despite Intel's struggles in bringing artificial intelligence (AI) chips to market during the current period of euphoria, it'll likely get another chance when AI expectations reset in the future. In other words, Intel can still be a leader in AI, despite its tardiness.
4. Fastly
The fourth beaten-down stock with an apparent price dislocation that I bought during Wall Street's historic volatility is cloud edge platform Fastly (NYSE: FSLY). Even though Fastly's growth rate in recent quarters has been a bit disappointing, the company's long-term outlook and valuation continue to be compelling.
Fastly is best-known for its content delivery network (CDN), and for its security solutions, to a lesser degree. Effectively, it expedites getting information from the edge of the cloud in a secure manner to end users. With businesses moving their data, and that of their customers, online and into the cloud at an accelerated pace following the COVID-19 pandemic, it's created a scenario where Fastly should enjoy steady growth for many years to come.
While a net retention rate of 102% over the last twelve months leaves a lot to be desired (this means existing customers increased their spending by 2% year-over-year), Fastly's enterprise customer count is climbing and its annual revenue retention rate has consistently been 99% or a tad higher. Clients are sticking with the company, which, along with mindful spending, should improve operating cash flow in 2025 and beyond.
Admittedly, Fastly is a long-term story that isn't going to turn around overnight. But with shares trading below book value and at 1.2 times forecast sales for the current year (as of April 8) -- many cloud stocks are valued at a multiple of 5 to 10 times sales -- Fastly was a bargain I couldn't pass up.
5. BioMarin Pharmaceutical
Earlier this week, I also pulled the trigger on shares of specialty biotech company BioMarin Pharmaceutical (NASDAQ: BMRN). In spite of some concern about potential competition for its top-selling achondroplasia drug Voxzogo, the company's consistent growth, pipeline, and valuation are giving an all-systems-go signal.
One of the keys to BioMarin's success is that it focuses on orphan-disease therapies. This is a fancy way of saying it develops novel drugs to treat conditions that affect relatively small groups of patients. The advantage of being a specialty-drug developer is that competition is minimal or nonexistent, which tends to lead to highly predictable demand and strong pricing power.
For the moment, the aforementioned Voxzogo is BioMarin's core growth driver. Last year, the company raked in $2.85 billion in sales, representing an 18% year-over-year increase. Voxzogo accounted for around a quarter of net sales, with the company's enzyme therapy portfolio collectively adding $1.93 billion in net sales (up 12% from the prior year).
The second-half of 2025 should be an exciting time, with some of the company's most-promising pipeline candidates and existing therapies with label expansion opportunities unveiling clinical results.
BioMarin ended April 8 at just over 10 times forecast earnings for 2026 and roughly 3.4 times consensus sales for 2025. Both figures represent historic lows for the company.
6. PubMatic
Last but certainly not least is the company I've purchased shares of most-aggressively during the tumult on Wall Street, adtech up-and-comer PubMatic (NASDAQ: PUBM). Though PubMatic is in a similar position to Sirius XM in that it would struggle during a recession, the risk-versus-reward profile overwhelmingly favors "reward" at this point.
To state the obvious, economic expansions last significantly longer than contractions. Whereas the average recession since the end of World War II has stuck around for about 10 months, the typical period of growth endures for five years. This is a simple numbers game that strongly favors ad-driven businesses.
What makes PubMatic enticing is its focus on digital advertising. Operating as a sell-side platform that helps publishers sell their digital display space puts it at the center of the rapidly growing digital ad market for connected TV (CTV), video, and mobile. CTV is the company's fastest-growing segment and accounted for 20% of net sales during the December-ended quarter.
But PubMatic's biggest advantage might be its internally developed cloud infrastructure platform. Choosing to develop its own cloud infrastructure will ensure it keeps more its revenue as it scales. In other words, it'll generate superior margins as it grows.
Finally, PubMatic closed out 2024 with $2.90 per share in cash and no debt, and has generated positive operating cash flow for 10 years. Based on its $7.77 per share close on April 8, it was valued at 10 times forecast earnings per share (EPS) in 2026. If you back out the company's cash, we're talking more than like 6 times forecast EPS with long-term double-digit growth potential. PubMatic's price dislocation is as clear-cut as they come.
Should you invest $1,000 in Pfizer right now?
Before you buy stock in Pfizer, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Pfizer wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $509,884!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $700,739!*
Now, it’s worth noting Stock Advisor’s total average return is 820% — a market-crushing outperformance compared to 158% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.
See the 10 stocks »
*Stock Advisor returns as of April 10, 2025
Sean Williams has positions in BioMarin Pharmaceutical, Fastly, Intel, Pfizer, PubMatic, and Sirius XM. The Motley Fool has positions in and recommends Advanced Micro Devices, Cadence Design Systems, Fastly, Intel, Pfizer, and PubMatic. The Motley Fool recommends BioMarin Pharmaceutical and recommends the following options: short May 2025 $30 calls on Intel. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

6 Stocks With Clear Price Dislocations That I Purchased During Wall Street's Historic Volatility

Over the last five weeks, investors have been given a needed but potentially unpleasant reminder that stocks don't move higher in a straight line. Between Feb. 19 and March 21, the widely followed Dow Jones Industrial Average, broad-based S&P 500 (SNPINDEX: ^GSPC), and growth stock-powered Nasdaq Composite (NASDAQINDEX: ^IXIC) respectively shed 5.9%, 7.8%, and 11.3% of their value.
You'll note the double-digit percentage decline for the Nasdaq Composite firmly placed this market-leading index in correction territory.
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While stock market corrections are traditionally a great time to do some bargain hunting, a historically pricey market has made me think twice about pulling the trigger. During this five-week downturn, there's only one stock I've purchased -- and it's quickly become one of my core holdings.
Valuation remains a front-and-center concern for the stock market
Before digging into the details of the one and only stock I've bought with frequency in recent weeks, let me explain my reasons for walking on eggshells during the current Nasdaq sell-off.
The prevailing concern I have for Wall Street has little to do with President Donald Trump's tariffs, the prevailing rate of inflation, or what the Federal Reserve might do next with interest rates. Rather, it's the historic priciness of equities.
To state the obvious, "value" is a subjective term. What I view as exceptionally pricey might be deemed a bargain by another investor. Despite having some degree of play when it comes to the subjectivity of what constitutes value, statistics undeniably say that stocks are pricey.
My go-to valuation tool that helps me assess the relative cheapness or priciness of the broader market is the S&P 500's Shiller price-to-earnings (P/E) Ratio. You'll also find the Shiller P/E referred to as the cyclically adjusted P/E Ratio (CAPE Ratio).
S&P 500 Shiller CAPE Ratio data by YCharts.
The Shiller P/E is based on average, inflation-adjusted earnings from the previous 10 years. Adjusting for inflation and looking at a decade's worth of earnings history provides the closest thing to an apples-to-apples valuation comparison.
As of the closing bell on March 21, the S&P 500's Shiller P/E Ratio clocked in at 35.28. For context, this is more than double its average reading of 17.22, when back-tested to January 1871. Additionally, the peak reading of 38.89 in December marked the third-highest reading during a continuous bull market cycle, dating back 154 years.
On top of the Shiller P/E telling me that stock valuations are extended to the upside, historic precedent provides a warning. The previous five times (excluding the current instance) the S&P 500's Shiller P/E topped 30 were eventually followed by declines in the benchmark index of at least 20%.
In other words, outsized readings for the S&P 500's Shiller P/E have historically been a harbinger of eventual (keyword!) big-time downside. While I'm more than happy to nibble when I find an occasional bargain, most of my cash reserves are saved for declines of 20% or greater following these periods of extended valuations.
I've nearly doubled my stake in this high-growth, cash-rich tech stock
With a better understanding of why I'm not itching to press the buy button just yet on the vast majority of stocks, let me introduce you to the one existing holding that coerced me to purchase shares on more than one occasion over the previous three weeks: adtech stock PubMatic (NASDAQ: PUBM).
PubMatic is a cloud-based, supply side, programmatic ad platform that assists publishers in selling their digital display space. Its sole focus is digital advertising, including the likes of video, mobile, and connected TV (CTV) -- i.e., ads presented during streamed content.
As you'll note in PubMatic's chart, shares dove a little over three weeks ago. This tumble had everything to do with its first-quarter guidance and full-year outlook failing to measure up to the consensus of analysts. PubMatic's second-largest demand-side platform (DSP) customer, Alphabet's (NASDAQ: GOOGL)(NASDAQ: GOOG) Google DV360, has adjusted its bidding algorithm, which PubMatic's management team suggests will create revenue hiccups through the midpoint of 2025, but not beyond.
Take note, PubMatic hasn't specifically called out Google DV360 as the DSP whose bidding algorithm has changed, but it's easy enough to put two-and-two together with The Trade Desk and Alphabet's Google DV360 being the only two DSPs mentioned in the company's risk factors section. Once this change is worked through in the coming months, PubMatic is expected to return to double-digit sales growth.
Beyond this growth hiccup with Alphabet, PubMatic's digital ad segments are growing like weeds. CTV revenue more than doubled in the fourth quarter from the prior-year period and accounted for 20% of the company's total sales. As CTV becomes a larger component of total revenue, PubMatic's sales growth should accelerate.
To add fuel to the fire, management made the decision many years back to build out its cloud-based infrastructure. Though it would have been notably cheaper and faster to rely on a third-party platform, the decision to build out and control its own infrastructure is expected to result in a superior operating margin as revenue scales. I fully expect earnings growth to outpace sales growth in the latter-half of this decade.
Another reason I felt comfortable significantly adding to my stake in PubMatic is its cash-rich balance sheet. This is a company that's generated positive cash flow from operations for 10 consecutive years, and it closed out 2024 with $140.6 million in cash, cash equivalents, and marketable securities, to go along with no debt. PubMatic is nearing $3 per share in cash, yet its shares closed out last week at just $9.75.
PUBM Shares Outstanding data by YCharts.
I'll also add that the company's board hasn't been shy about using its cash to repurchase stock. Since implementing buybacks two years ago, the company's outstanding share count has declined by more than 8%. For businesses with steady or growing net income, buybacks tend to have a positive impact on earnings per share (EPS).
To round things out, PubMatic is jaw-droppingly cheap. Shares are currently valued at 12.7 times forward-year EPS, or a forward P/E below 9 if you back out the company's cash position. It's an incredibly inexpensive price to pay for a company at the center of the digital-ad revolution that can sustain a double-digit growth rate -- and it's quickly become a top-10 holding of mine.
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Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. Sean Williams has positions in Alphabet and PubMatic. The Motley Fool has positions in and recommends Alphabet, PubMatic, and The Trade Desk. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
Founded in 1993 in Alexandria, VA., by brothers David and Tom Gardner, The Motley Fool is a multimedia financial-services company dedicated to building the world's greatest investment community. Reaching millions of people each month through its website, books, newspaper column, radio show, television appearances, and subscription newsletter services, The Motley Fool champions shareholder values and advocates tirelessly for the individual investor. The company's name was taken from Shakespeare, whose wise fools both instructed and amused, and could speak the truth to the king -- without getting their heads lopped off.

Indicator	TTM Median
P/E	44.41 15.04
Price/Sales	3.17 0.99
P/B	2.88 1.44
P/FCF	15.65 11.54

Indicator	TTM Median
ROE	7.26 13.09
ROA	3.22 4.76
Net Worth	0.91 0.77
Quick Ratio	0.00 0.94
Current Ratio	1.44 1.25

Indicator	TTM Median
Net Profit Margin	7.42 9.66
Operating Margin	3.18 14.22
Gross Margin	63.96 54.08
Return on tangible equity	8.27 25.55

Indicator	TTM Median
EPS	0.02 0.25
EPS Forecast	0.07 0.22
Revenue	67.00M 89.00M
Gross Profit	42.00M —
EBITDA	7.00M —

PubMatic, Inc.

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