Verve Group SE
Original-Research: Media and Games Invest SE (von GBC AG): BUY

Original-Research: Media and Games Invest SE – von GBC AG

Einstufung von GBC AG zu Media and Games Invest SE

Unternehmen: Media and Games Invest SE
ISIN: SE0018538068

Anlass der Studie: Research study (Anno)
Empfehlung: BUY
Kursziel: 5.30 EUR
Letzte Ratingänderung:
Analyst: Marcel Goldmann, Cosmin Filker

Financial year 2022 closed with a significant improvement in revenue and
operating profit; A continuation of the profitable growth course is
expected for 2023; The expansion of the ad tech platform business should
lead to significant revenue and earnings growth in the future; Target
price: € 5.30 (previously: € 5.40); Rating: BUY
 
Based on the published business figures, Media and Games Invest SE (MGI)
continued its dynamic growth course in the past financial year 2022 with a
significant increase in turnover of 28.7% to € 324.44 million (PY: € 252.17
million) despite difficult general conditions and market situation. Their
digital programmatic advertising software platform business again proved to
be their main growth driver. In this high-growth area, the increase in
their software customer base to 551 customers (end of 2021: 418)
significantly increased their business volume. The strong business growth
achieved is also reflected in MGI’s leading market position. According to a
market study (Pixalate’s Mobile SSP Report), MGI’s Verve Group is the
market leader in mobile programmatic advertising for Android in North
America with a 12% share. This exceeded the company’s guidance at the upper
end of the target range (revenue of € 315.0m to € 325.0m) and also our
revenue estimate (GBCe: € 307.22m).
 
Parallel to the positive development of turnover, significant increases
were achieved at the operating result level. Compared to the previous year,
EBITDA grew significantly by 30.3% to € 84.75 million. Adjusted for one-off
effects (e.g. special and restructuring costs from M&As), EBITDA (Adj.
EBITDA) also grew rapidly with a dynamic increase of 31.1% to € 93.20
million. Accordingly, the company’s earnings guidance (Adj. EBITDA: € 83.0
million to € 93.0 million) and also our earnings estimate (Adj. EBITDA: €
91.72 million) were exceeded.
 
MGI’s management is also positive about the current 2023 financial year and
expects to continue on its growth path. Specifically, the technology
company expects a renewed increase in sales revenues in a range of € 335.0
million to € 345.0 million. At the earnings level, an adjusted EBITDA of
between € 95.0 million and € 105.0 million is to be achieved.
 
As part of the publication of our research study on the preliminary annual
results of MGI’s 2022 financial year, we have slightly reduced our previous
revenue and earnings forecasts for the current 2023 financial year for
conservative reasons. For the following year, we have left our previous
operating estimates unchanged. In view of the satisfactory Q1 performance,
the positive corporate outlook and the reaffirmation of the medium-term
guidance (revenue CAGR 25.0%-30.0%, EBITDA CAGR 25.0%-30.0%), we confirm
our previous revenue and earnings forecasts for the current financial year
and subsequent years. For 2022, we continue to expect revenues of € 340.12
million and EBITDA of € 89.44 million. For 2024 and 2025, we continue to
expect revenues (EBITDA) of € 402.55 million (€ 115.80 million) and €
471.39 million (€ 136.14 million), respectively.
 
Overall, the MGI Group, with its good market positioning and
fully-integrated programmatic ad tech platform with its own games content,
should succeed in continuing its dynamic growth course in the future. While
the technology company has built up a strong position on the supply side in
recent years, with a strong SDK base in the premium mobile app sector, the
demand side in particular should be the focus of targeted growth in the
future and be further expanded. The Contextual Mobile Demand Side Platform
‘Dataseat’, which was acquired in 2022, was an important building block of
MGI’s growth strategy and has additionally strengthened the Demand Side and
also underlines their growth ambitions in this business area.
 
In addition, with liquidity of around € 130.0 million at the end of the
first quarter of 2023, MGI continues to be in a good financial position and
can thus take advantage of investment opportunities as well as being able
to comfortably cushion recessionary macroeconomic situations. The gearing
ratio, which was at a good level of 3.0x at the end of the last quarter,
should also improve further in the short and medium term due to their
positive cash flow and their expected EBITDA growth.
 
Based on our confirmed forecasts for the current financial year 2023 and
the following years and the changed cost of capital (WACC), we have
slightly lowered our previous price target to € 5.30 (previously: € 5.40).
Our price target reduction is the result of higher capital costs (increase
in the risk-free interest rate to 2.0% instead of the previous 1.5%). As a
consequence of the unchanged high inflation, we have raised the terminal
value growth rate to 2.5% (previously: 2.0%), which has had the effect of
raising the target price. In view of the current share price level, we thus
continue to assign a ‘Buy’ rating and see significant upside potential. The
results of our peer group analysis (see p. 21) also support our assessment
of the attractiveness and price potential of the MGI share.
 

Die vollständige Analyse können Sie hier downloaden:
http://www.more-ir.de/d/27233.pdf

Kontakt für Rückfragen
GBC AG
Halderstrasse 27
86150 Augsburg
0821 / 241133 0
research@gbc-ag.de
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Offenlegung möglicher Interessenskonflikte nach § 85 WpHG und Art. 20 MAR. Beim oben analysierten Unternehmen ist folgender möglicher Interessenkonflikt gegeben: (5a,7,11); Einen Katalog möglicher Interessenkonflikte finden Sie unter: http://www.gbc-ag.de/de/Offenlegung
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Date (time) of completion: 20/06/2023 (8:43 am)
Date (time) of first distribution: 20/06/2023 (10:30 am)

——————-übermittelt durch die EQS Group AG.——————-


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