Edison Updates on MGI's Growth Trajectory and Improved Financial Outlook

Edison Investment Research Limited highlighted Media and Games Invest's (MGI) significant progress in a recent update titled "Back on a growth track". In Q4 2023, MGI showcased substantial market share gains and a notable improvement in its trading environment. The company reported a 16% organic revenue growth for the quarter, contributing to a yearly increase of 5%. This positive trend has extended into the current year with an 18% revenue growth observed in January.

MGI has established a dominant presence in the in-app advertising sector within the US, leveraging its leading positions on both iOS and Android platforms. With the US market constituting 70% of its revenues, MGI's focus on non-identifier-based and AI-driven solutions positions it strategically in the digital advertising space. Moreover, in the burgeoning Connected TV (CTV) market, MGI prioritizes margin over volume, indicating a strategic approach towards sustainable growth.

Edison's updated review also reflects raised FY24 estimates for MGI based on its improving growth and margin prospects, suggesting that these advancements are not yet fully recognized in the company's valuation. Despite the positive performance of adtech shares, MGI continues to be undervalued when compared to its peers. However, projections indicate a potential increase in its share price to €3.70, subject to adjustments in rating parity across key financial metrics.