CTV And Programmatic Trends Will Reshape Global Advertising

Key Takeaways

• Exclusive partnerships and global expansion are positioning Nexxen for significant market share gains, diversified revenue streams, and increased profitability amid industry consolidation.
  
• Advanced AI integration and privacy-focused, cookie-less data offerings are set to drive operational efficiency, recurring revenues, and establish Nexxen as a key digital infrastructure provider.
  
• Nexxen faces mounting risks from ad blocking, regulatory pressures, reliance on key partners, slower innovation, and industry dominance by tech giants, threatening growth and profitability.

Catalysts

Provides end-to-end and video-first platform that engages advertising campaigns for brands, agencies, media groups, and content creators worldwide.

• While analyst consensus expects strong CTV revenue growth from streaming adoption, the market appears to be underestimating the impact of Nexxen's exclusive inventory and data partnership with VIDAA, which will unlock highly profitable, premium ad inventory and first-party TV data across millions of devices as VIDAA expands from #5 to #2 in global CTV shipments and ramps up North American presence starting in 2026, likely driving a step-change in both overall revenue and gross margins.
  
• Analysts broadly agree Nexxen's AI-enabled precision targeting and automation will drive client retention and margin lift, but this view does not fully reflect the transformative platform-wide rollout of nexAI and cross-stack AI assistants; rapid adoption and ongoing feature expansion are set to drive dramatic operational efficiency, power increased automation at scale, and meaningfully expand adjusted EBITDA margins further than consensus expects, especially as AI integrates SSP, DSP, and data management.
  
• Nexxen's accelerating off-platform data and technology licensing-fueled by industry-leading, privacy-oriented, cookie-less and ACR datasets-is opening vast, high-margin recurring revenue streams beyond media activation, positioning the company as a critical infrastructure vendor in an ecosystem where data-driven, privacy-compliant solutions are becoming the new standard, with upside to both top-line and stable, SaaS-like earnings.
  
• The coming shakeout in the ad tech supply landscape-due to regulatory remedies against Google and ongoing industry consolidation-will allow scaled, independent, end-to-end platforms like Nexxen to capture share from weakened rivals and access previously Google-controlled inventory, setting up sustained market share gains and stronger growth in media volumes and profitability.
  
• Nexxen's international expansion, especially with OEM CTV platforms and emerging mobile in-app monetization, is rapidly diversifying the customer and revenue base into high-growth, non-U.S. digital markets, reducing reliance on any single channel and providing long-term revenue resilience and opportunities for double-digit revenue and EBITDA growth.

Nexxen International Future Earnings and Revenue Growth

Assumptions

• This narrative explores a more optimistic perspective on Nexxen International compared to the consensus, based on a Fair Value that aligns with the bullish cohort of analysts.
• The bullish analysts are assuming Nexxen International's revenue will grow by 10.2% annually over the next 3 years.
• The bullish analysts assume that profit margins will shrink from 13.4% today to 10.3% in 3 years time.
• The bullish analysts expect earnings to reach $51.2 million (and earnings per share of $0.98) by about September 2028, up from $49.7 million today. The analysts are largely in agreement about this estimate.
• In order for the above numbers to justify the price target of the more bullish analyst cohort, the company would need to trade at a PE ratio of 30.1x on those 2028 earnings, up from 12.7x today. This future PE is greater than the current PE for the GB Media industry at 20.3x.
• Analysts expect the number of shares outstanding to decline by 6.35% per year for the next 3 years.
• To value all of this in today's terms, we will use a discount rate of 8.37%, as per the Simply Wall St company report.

Nexxen International Future Earnings Per Share Growth

Risks

• Rising adoption of ad-blocking technology and increased data privacy regulation threaten the effectiveness and volume of Nexxen's addressable digital ad inventory, which could suppress long-term revenue growth and reduce cost per mille rates for advertisers.
  
• Intensifying industry migration toward vertically integrated walled gardens like Google, Amazon, and Meta is eroding open Internet ad market share for third-party platforms such as Nexxen, putting sustained downward pressure on revenue and market share over time.
  
• Heavy investment in exclusive partnerships, such as with VIDAA, exposes Nexxen to concentration risk; any shift in partner performance, strategy, or market penetration could amplify earnings volatility and impact revenue predictability.
  
• Nexxen's relatively slow CTV revenue growth compared to industry peers, as well as declining mobile revenue and volatility in display and PMP channels, signal risks of underperformance versus competitors with faster innovation cycles, potentially constraining both topline growth and long-term earnings.
  
• Ongoing sector consolidation and escalating compliance costs from regulatory scrutiny threaten to diminish Nexxen's operating margins, increase fixed costs, and challenge its capacity to compete profitably over the long term against larger, better-resourced rivals.

Valuation

• The assumed bullish price target for Nexxen International is $23.33, which represents two standard deviations above the consensus price target of $16.49. This valuation is based on what can be assumed as the expectations of Nexxen International's future earnings growth, profit margins and other risk factors from analysts on the bullish end of the spectrum.
• However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of $25.4, and the most bearish reporting a price target of just $14.0.
• In order for you to agree with the bullish analysts, you'd need to believe that by 2028, revenues will be $497.0 million, earnings will come to $51.2 million, and it would be trading on a PE ratio of 30.1x, assuming you use a discount rate of 8.4%.
• Given the current share price of $9.92, the bullish analyst price target of $23.33 is 57.5% higher.
• We always encourage you to reach your own conclusions though. So sense check these analyst numbers against your own assumptions and expectations based on your understanding of the business and what you believe is probable.