An overlooked and undervalued platform company
We initiate our coverage of MGI with a target price of SEK 23 and a BUY recommendation. The majority of MGI’s revenues are derived from commissions for matching advertiser and publishers on their ad software platform. As a platform company MGI’s costs are mainly variable, which should enable the company to scale up while still delivering solid earnings growth. Considering these factors, we assess that the company has good prospects for long-term value creation. At the current valuation, the market expectations for MGI are low and should be beatable with decent growth and a modest upshift in valuation multiples. At the current market valuation, we consider the risk/return ratio to be attractive.
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 Figures12.12.2022
2021 | 22e | 23e | |
---|---|---|---|
Revenue | 252.2 | 323.0 | 352.0 |
growth-% | 79.84 % | 28.08 % | 8.99 % |
EBIT (adj.) | 54.9 | 67.8 | 66.5 |
EBIT-% (adj.) | 21.76 % | 20.98 % | 18.89 % |
EPS (adj.) | 0.24 | 0.19 | 0.18 |
Dividend | 0.00 | 0.00 | 0.00 |
Dividend % | |||
P/E (adj.) | 18.35 | 9.20 | 10.04 |
EV/EBITDA | 13.18 | 7.36 | 6.88 |