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  • UTMCAP TMT - Stock Pick

UTMCAP TMT - Stock Pick - Comps

1. The Trade Desk (TTD) - Programmatic Advertising DSP

Company Valuation Metrics (as of January 2026):

• Market Cap: $\mathrm{\$}18.2$ billion
• P/E Ratio (TTM): $42.65$x
• Forward P/E: $29.67$x
• Price/Sales: $6.75$x
• EV/EBITDA: $27.20$x
• Price/Free Cash Flow: $27.75$x
• Revenue (TTM): $\mathrm{\$}2.8$ billion with $20.8\mathrm{\%}$ YoY growth
• Net Margin: $15.7\mathrm{\%}$
• Gross Margin: $78.8\mathrm{\%}$

Comparable Companies:

Competitive Positioning:
The Trade Desk trades at a premium to Magnite ($6.75$x P/S vs Magnite's $4.25$x P/S) but demonstrates superior profitability with $15.7\mathrm{\%}$ net margins versus Magnite's $6.3\mathrm{\%}$ . TTD's $20.8\mathrm{\%}$ revenue growth significantly outpaces Magnite's $11\mathrm{\%}$ but lags AppLovin's extraordinary $77\mathrm{\%}$ growth driven by AI-powered mobile gaming monetization . However, AppLovin operates in a different sub-segment (mobile app monetization) versus TTD's omnichannel programmatic focus. The Trade Desk's $78.8\mathrm{\%}$ gross margins and independent positioning (not competing with Google/Meta) justify its premium valuation .

2. Shopify (SHOP) - E-Commerce Enablement Platform

Company Valuation Metrics (as of January 2026):

• Market Cap: $\mathrm{\$}100.93$ billion
• P/E Ratio (TTM): $100.22$x
• Forward P/E: $114.16$x
• Price/Sales: $23.13$x
• Forward P/S (2025E): $17.5$x
• Revenue (Q3 2025): $\mathrm{\$}2.84$ billion, up $32\mathrm{\%}$ YoY
• Free Cash Flow Margin: $18\mathrm{\%}$ of revenue
• GMV (Q3 2025): $\mathrm{\$}92$ billion, up $32\mathrm{\%}$ YoY

Comparable Companies:

Competitive Positioning:
Shopify trades at a significant premium with a $23.1$x P/S ratio compared to the broader software industry average forward P/E of $25.92$x . However, the company's $32\mathrm{\%}$ revenue growth, $32\mathrm{\%}$ GMV growth, and expanding $18\mathrm{\%}$ free cash flow margins justify the premium . Shopify captures $15.2$x revenue multiple in vertical SaaS analysis, above Toast's $2.4$x but aligned with its scale and growth profile . The company's network effects (more merchants attract more apps/developers, which attracts more merchants) and international expansion ($49\mathrm{\%}$ GMV growth in Europe) differentiate it from competitors like BigCommerce and Wix which focus on narrower segments .

Industry Context:
The vertical SaaS market average trades at $12.3$x revenue versus broader SaaS at $7.6$x, with Shopify commanding premium positioning due to its fintech integration and fulfillment network . Private SaaS companies trade at a median $7.0$x revenue as of 2025 .

3. Toast (TOST) - Restaurant Vertical SaaS Platform

Company Valuation Metrics (as of January 2026):

• Market Cap: Approximately $\mathrm{\$}8-10$ billion range
• P/E Ratio (TTM): $95.5$x
• Price/Sales: $2.4$x (from vertical SaaS analysis)
• Revenue (Q3 2025): $\mathrm{\$}1.6+$ billion annualized
• Adjusted EBITDA (Q3 2025): $\mathrm{\$}176$ million with $35\mathrm{\%}$ margins
• GAAP Operating Income: $\mathrm{\$}84$ million
• Annualized Recurring Revenue: $\mathrm{\$}2.0+$ billion, growing $30\mathrm{\%}$ YoY
• Net Margin (Q3 2025): $6.44\mathrm{\%}$

Comparable Companies:

Competitive Positioning:
Toast trades at $2.4$x revenue, significantly below the vertical SaaS average of $12.3$x and well below Shopify's $15.2$x . This discount reflects Toast's earlier stage in monetization maturity despite impressive unit economics. The company's $35\mathrm{\%}$ EBITDA margins exceed many software peers and demonstrate operational leverage . Toast's trajectory mirrors "Shopify's 2015-2017 period when it expanded from 50,000 to 100,000 merchants while maintaining a CAC-LTV ratio above 4:1" . With $24\mathrm{\%}$ YoY location growth and $30\mathrm{\%}$ SaaS ARR growth, Toast demonstrates compounding network effects similar to early-stage Salesforce .

Valuation Analysis:
At $95.5$x P/E versus industry average of $16.7$x, Toast appears expensive on earnings but the $2.4$x revenue multiple suggests significant upside as the company scales . The $6.44\mathrm{\%}$ net margin in Q3 2025 already exceeds typical mature SaaS benchmarks, indicating strong fundamentals . As Toast penetrates deeper into its $\mathrm{\$}50+$ billion TAM with expanding fintech attach rates ($49$ basis points take rate, up $4$bps YoY), valuation multiples should expand toward peers like Veeva ($12.2$x) .

4. PubMatic (PUBM) - Publisher-Side Programmatic Advertising SSP

Company Valuation Metrics (as of January 2026):

• Market Cap: $\mathrm{\$}400$ million range
• P/E Ratio (TTM): Negative/-$125.0$x (recent losses)
• Forward P/E: Highly volatile
• Price/Sales: $1.37$x
• Revenue (TTM): $\mathrm{\$}292.21$ million
• Revenue Growth: $6\mathrm{\%}$ YoY
• CTV Revenue: $41\mathrm{\%}$ of total, growing $50+\mathrm{\%}$ YoY
• EBITDA Margin: ~$20\mathrm{\%}$
• Net Margin: $-0.58\mathrm{\%}$

Comparable Companies:

Competitive Positioning:
PubMatic trades at a significant discount with $1.37$x P/S versus Magnite's $4.25$x and The Trade Desk's $6.75$x . This discount reflects PubMatic's smaller scale ($\mathrm{\$}292$M revenue vs Magnite's $\mathrm{\$}668$M), slower growth ($6\mathrm{\%}$ vs $11\mathrm{\%}$), and unprofitable status . However, analysts view PUBM as "significantly undervalued compared to peers like Magnite and The Trade Desk, despite similar business models and growth prospects" .

Investment Thesis:
PubMatic's $1.37$x P/S ratio is exceptionally low for a company with $50+\mathrm{\%}$ CTV revenue growth (fastest growing segment) and $20\mathrm{\%}$ EBITDA margins . The company's owned infrastructure provides structural cost advantages versus cloud-dependent competitors. As CTV advertising reaches $\mathrm{\$}20+$ billion by 2026, PubMatic's $41\mathrm{\%}$ CTV revenue concentration positions it for multiple expansion . The stock offers value play potential as it scales toward profitability. Magnite "beats PubMatic on 13 of 16 factors" currently, but PUBM's $42\mathrm{\%}$ upside analyst target versus MGNI's $37\mathrm{\%}$ suggests the market recognizes catch-up potential .

5. Roku (ROKU) - Streaming Platform & CTV Advertising

Company Valuation Metrics (as of January 2026):

• Stock Performance: Up $46.1\mathrm{\%}$ YTD (2025), $35\mathrm{\%}$ over past year
• EV/Forward Revenue: $2.4-2.5$x average (next 5 years projection)
• Revenue (2024): $\mathrm{\$}4.1$ billion, up $18\mathrm{\%}$ YoY
• Platform Revenue (2024): $\mathrm{\$}3.5$ billion, up $18\mathrm{\%}$ YoY
• Q3 2025 Revenue: $\mathrm{\$}1.21$ billion, up $14\mathrm{\%}$ YoY
• Free Cash Flow (LTM): $\mathrm{\$}394.9$ million
• Gross Profit (2024): $\mathrm{\$}1.8$ billion, up $19\mathrm{\%}$ YoY
• Operating Loss (2024): $\mathrm{\$}(218.2)$ million - significant improvement

Comparable Companies:

Competitive Positioning:
Roku's $2.4-2.5$x EV/forward revenue multiple appears attractive for a company with $18\mathrm{\%}$ platform revenue growth and improving profitability trajectory . The company's operating loss narrowed from $\mathrm{\$}(710)$ million to $\mathrm{\$}(218.2)$ million in 2024, with Q3 2025 showing continued improvement . Roku's $24.2\mathrm{\%}$ sales growth "is in a different league right now—miles ahead of the market's $8.8\mathrm{\%}$ average" in streaming .

Strategic Value:
Unlike pure-play advertisers (The Trade Desk) or content companies (Netflix), Roku owns the "gateway to streaming" with $89.8$ million households and the #2 most engaged streaming app (The Roku Channel) . This positions Roku to capture value across the streaming stack: device subsidies, OS licensing, advertising, content distribution fees, and premium subscription revenue sharing . Platform revenue at $86\mathrm{\%}$ of total revenue ($\mathrm{\$}3.5$B/$\mathrm{\$}4.1$B) demonstrates the business model transition away from low-margin hardware .

Valuation Outlook:
Analysts project Roku's Free Cash Flow growing from $\mathrm{\$}394.9$ million (LTM) to $\mathrm{\$}1.44$ billion by 2029 as the company achieves scale efficiencies . The $46\mathrm{\%}$ YTD stock rally reflects improving sentiment around CTV advertising monetization and platform engagement (35.4 billion streaming hours in Q2 2025) . At $2.4$x forward revenue, Roku trades at a discount to The Trade Desk's $6.75$x despite operating in similar CTV advertising markets, suggesting potential for multiple expansion .

Cross-Company Valuation Summary

Valuation Metrics Comparison:

Key Insights:

1. Premium vs. Value Positioning: The Trade Desk and Shopify command premium valuations ($6.75$x and $23.1$x P/S) justified by superior growth, profitability, and market leadership . Toast, PubMatic, and Roku trade at discounts ($2.4$x, $1.37$x, $2.4$x P/S) reflecting earlier profitability stages or execution uncertainties .

2. Vertical SaaS Premium: Toast's $2.4$x revenue multiple is below the $12.3$x vertical SaaS average, suggesting significant upside as the company matures toward peers like Veeva ($12.2$x) and Shopify ($15.2$x) .

3. CTV Advertising Convergence: The Trade Desk, PubMatic, and Roku all benefit from CTV advertising growth toward $\mathrm{\$}20+$ billion, but trade at vastly different multiples ($6.75$x, $1.37$x, $2.4$x) reflecting profitability and scale differences .

4. Growth vs. Profitability Trade-off: Shopify and Toast trade at high P/E ratios ($100+$x and $95+$x) due to recent profitability inflection, while PubMatic and Roku remain unprofitable with negative P/E ratios . However, all show improving unit economics and paths to sustained profitability.