Edison Investment Research Limited
London, UK, 24 November 2022
Media and Games Invest (MGI): Adtech credentials boosted by Google partnership
Media and Games Invest’s (MGI’s) media operation, Verve Group, has been made a partner on Google’s Open Bidding platform. This gives it far wider reach on both the demand (advertiser) side and supply (publisher) side, accessing inventory (advertising opportunities) via real-time auctions. MGI’s Q3 revenue growth was strong at 39% (23% organic) and FY22 guidance was lifted, with margin pressure from market conditions resulting in unchanged EBITDA guidance. We have adjusted our forecasts accordingly. Google’s endorsement should give greater confidence in MGI’s medium-term prospects as it concentrates on organic growth rather than on M&A. The rating remains at a market discount to peers.
MGI’s share price is down 57% year to date, versus global adtech peers down 52% on average, while quoted gaming companies have done a little better, retrenching by 25%. MGI’s shares are valued below both sets of peers. Parity averaged across FY21–23 would imply a share price of €4.43 (was €3.93), with a DCF indicating a value of €4.21 (was €4.13).
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