Deadpool star Ryan Reynolds-backed MNTN (MNTN) has had a blockbuster debut, with its stock gaining by a massive 60% from its IPO price of $16. Now trading at just over $25, the company’s market cap has already soared to about $2 billion. Apart from Reynolds, who also serves as the chief creative officer of the company, MNTN has marquee backers like BlackRock (BLK) and Baroda Ventures.

But the big question is, after such a stellar debut, can MNTN be seen as a long-term bet? Let’s find out.

Improving Financials

Founded in 2009, MNTN (pronounced Mountain) is a U.S.-based advertising technology company specializing in connected TV (CTV) advertising solutions. Over the last two years, the company has seen its revenues increasing at a steady rate. While revenues for the year 2023 were at $176.3 million, it rose to $225.6 million in 2024. Encouragingly, with increasing revenues, the company reported an even higher uptick in gross profit by 30.9% on a year-over-year basis to $161.5 million in 2024, reflecting competitive strength.

Net losses also narrowed to $32.9 million from $53.3 million in the year-ago period.

Meanwhile, net cash from operating activities surged to $42.5 million in 2024 from about $18 million in 2023, with the company ending the year with a healthy cash balance of $82.6 million.

Solid Niche

According to the company’s initial public offering documentation, performance-based marketing expenditures in the United States are projected to reach $285.4 billion, with an anticipated compound annual growth rate of 9.7%, pushing that figure to approximately $343.6 billion by the year 2027. Within this broader trend, connected TV (CTV) advertising has witnessed a meteoric rise, expanding from $2.8 billion in 2017 to a forecast $33.4 billion in 2025, as per data from eMarketer. These numbers underscore the significant momentum in the space where the company is operating.

Yet, the company’s true strength lies in its strategic focus on a very specific segment: advertising services designed for small and mid-sized enterprises. By tailoring its platform to address the distinct challenges faced by these businesses, ranging from steep upfront investments and limited access to real-time insights, to the prohibitive expense of creating high-quality content — MNTN has carved out a unique and promising position in the ad tech landscape.

Expanding on this focus, Chief Executive Officer Mark Douglas remarked that a striking 92% of their clientele had never launched a television ad before working with them. He noted that it is rare — if not unprecedented — for firms in this domain to report such a high percentage of first-time TV advertisers. Their technology-centered platform enables clients to leverage performance marketing via streaming television in a way that is both accessible and measurable.

In essence, MNTN is pursuing a dual-track growth initiative: deepening its reach among mid-sized businesses, where it has already found considerable traction, and bringing on board a new wave of clients who are venturing into television advertising for the first time.

Given shifting consumer patterns—particularly the increase in multiscreen engagement and the growing tendency to make purchases while viewing content on CTV — the outlook for e-commerce integration and interactive advertising appears favorable, potentially positioning MNTN to benefit from these evolving behaviors.

Final Take

Backed by a slew of noteworthy investors and helmed by a proven industry veteran in Mark Douglas, MNTN stands in a good position to benefit from the rising CTV advertising market. Moreover, its strong financial and liquidity position provides it with the firepower to innovate and improve its offerings.

However, investors may need to tread carefully in the near term, as the stock’s substantial appreciation following its debut has led to elevated valuation levels that could be difficult to justify in the current environment. Moreover, with macroeconomic conditions remaining uncertain and potentially turbulent, the company’s core clientele — small and medium-sized businesses — might scale back on discretionary spending, particularly in areas like advertising. This poses the risk of near-to mid-term revenue softness for the company, especially if budget-conscious clients delay or reduce marketing investments.