MGI: Lower growth, but improved profitability
MGI’s Q1 revenues came in lower than our estimates, but operating profit surprised to the upside. Operating cash flow meanwhile was weak but should improve as the year continues. We believe that MGI can reduce their debt load even in a tougher ad market and we see clear upside from low valuation as ad spending picks back up. We therefore reiterate our Buy recommendation but lower the target price to SEK 22 (prev. SEK 26) to reflect changes in estimates and an increase in WACC.
MGI - Media and Games Invest
MGI – Media and Games Invest SE (“MGI”) is an advertising software platform with strong first-party games content. MGI’s main operational presence is in North America and Europe. The Company combines organic growth with value-generating synergetic acquisitions, which has demonstrated continuous strong profitable growth with a revenue CAGR of 77% (2018 –2021). In addition to strong organic growth, MGI has successfully acquired more than 35 companies and assets in the past six years. The acquired assets and companies have been fully integrated and cloud technology is actively used to achieve efficiency gains and competitive advantages. MGI is registered as Societas Europaea in Malta (registration number SE 15) and its shares are listed on Nasdaq First North Premier Growth Market in Stockholm and in the Scale segment of the Frankfurt Stock Exchange. The Company has a secured bond that is listed on Nasdaq Stockholm and on the Frankfurt Stock Exchange Open Market.
Read more on company pageKey Estimate Figures01.06.2023
2022 | 23e | 24e | |
---|---|---|---|
Revenue | 324.4 | 339.9 | 370.4 |
growth-% | 28.66 % | 4.75 % | 8.99 % |
EBIT (adj.) | 76.6 | 77.1 | 75.4 |
EBIT-% (adj.) | 23.60 % | 22.70 % | 20.37 % |
EPS (adj.) | 0.19 | 0.19 | 0.18 |
Dividend | 0.00 | 0.00 | 0.00 |
Dividend % | |||
P/E (adj.) | 9.25 | 9.34 | 9.86 |
EV/EBITDA | 6.43 | 5.75 | 5.37 |