Avidly: Growth and growth investments
By Inderes
Avidly's growth has kept on familiar and strong track, even though profitability was below on expectations. In the next few years, we see clear drivers for the company's earnings growth in a structurally growing market. However, with higher growth investments and a softer profitability guidance, we lowered our earnings growth estimates for the next few years. Given the strong earnings growth outlook, the company's valuation (2023e EV/EBIT 9x) is still attractive. On the other hand, short-term share price drivers are weaker than before as the point of support for earnings-based valuation multiples moves forward and market uncertainty increases.