Edison issues update on MGI – Media and Games Invest (M8G): Back on a growth track

London, UK, 4 März 2024

Edison issues update on MGI – Media and Games Invest (M8G): Back on a growth track

M8G had a good Q423, gaining market share in an improving trading environment. Organic revenue growth of 16% in the quarter helped lift the full year figure to +5%. This good momentum has continued into the new year, with 18% revenue growth in January. MGI has leading positions in in-app advertising in the US on both iOS and Android, with the US its largest market at 70% of revenues, and has well established non-identifier-based and AI-driven solutions in the market. In the fast-growing Connected TV (CTV) market, MGI is targeting margin over volume. We have lifted our FY24 estimates reflecting the improving growth and margin prospects. Our view is that these are not yet factored into the valuation.

Adtech shares have generally performed well in the year-to-date, with a few exceptions, as prospects for improved ad spend have brightened. Scale is a clear benefit. MGI continues to trade at a considerable discount to peers across pure adtech and relevant content categories. With the roll-forward of the year and improved ratings in the overall peer set, parity of rating on EV/revenue and EV/EBITDA across FY24–25e would see the price climb to €3.70 (from €3.45 in December).

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