On Tuesday, August 8, after market close, AcuityAds will report its Q2, 2017 financials. Sangha thinks the company will post EBITDA of $300,000 on revenue of $17.7-million, compared to the consensus estimate of $600,000 in EBITDA on a topline of $17.8-million.
Sangha’s revenue estimate for AcuityAds’ Q2 would represent a 153 per cent bump over the same period last year.
In a research update to clients today, Sangha maintained his “Buy” rating, but raised his one-year price target on AcuityAds from $6.25 to $7.00, implying a return of 53.2 per cent at the time of publication. The analyst explained the reasoning behind the price target raise.
“We believe Acuity’s current share price represents a buying opportunity as the company’s shares have retreated 13% since its March 17 high of $5.24,” Sangha says. “Acuity is curently trading at 2.0x EV/Revenue of our CY17 estimates, which is lower than its peer group average which trades at 3.8x EV/Revenue of consensus CY17 estimates. Our target price is based don an EV/Revenue multiple of 2.3x our CY18 forecast (previously 2.0x). We increased our target multiple slightly based on the successful integration of Visible Measures and stronger revenue growth profile relative to its peer group.”
Sangha thinks AcuityAds will post Adjusted EBITDA of $4.2-million on revenue of $79.0-million in fiscal 2017. He thinks those numbers will improve to EBITDA of $9.8-million on a topline of $109-million the following year.