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Mediagrif set up for solid fiscal 2017, says Echelon

Outgoing Mediagrif CEO Claude Roy

Mediagrif (Mediagrif Stock Quote, Chart, News: TSX:MDF) ended fiscal 2016 with a quarter that was mixed, but Echelon Wealth Partners analyst Amr Ezzat thinks the company is set up for a solid fiscal 2017.

Yesterday, Mediagrif reported its Q4 and fiscal 2016 results. In the fourth quarter, the company posted a profit of $2.5-million (down from $4.6-million during the same period in 2015) on revenue of $18.8-million, a topline that was 8 per cent better than 2015’s Q4.

Ezzat says Mediagrif started slow, but now has momentum.

“After a slow first half of the fiscal year, sales continued to impress growing at 8% y/y, on the back of a FQ316 that saw sales increase 6%. EBITDA was a little lower than our estimate due to one-timers, but nothing to fret about,” says the analyst. “With the ASC acquisition now closed (Acquisition Note), MDF’s F2017 is shaping up to be a solid growth year with sales/EBITDA forecasted to grow at 7%/8%. With significant FCF generation, we see EPS growing at low teens aided by buybacks and financial deleveraging. With the shares trading at 10% NTM FCF yield, we continue to think this is an opportunistic time to accumulate a position in a solid operator.”

In a research update to clients today Ezzat maintained his “Buy” rating and one-year price target of $22.50 on Mediagrif, implying a return of 45.3 per cent at the time of publication.

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About The Author /

Cantech Letter founder and editor Nick Waddell has lived in five Canadian provinces and is proud of his country's often overlooked contributions to the world of science and technology. Waddell takes a regular shift on the Canadian media circuit, making appearances on CTV, CBC and BNN, and contributing to publications such as Canadian Business and Business Insider.
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