VerticalScope Holdings Inc T.FORA

Alternate Symbol(s): VTCHF

Communication Services

VerticalScope Holdings Inc. is a technology company. The Company is engaged in building and operating a cloud-based digital platform for online communities. The Company helps people with common interests to connect, explore their passions and share knowledge about the things they love. The Company has built a portfolio of approximately 1,200 online communities and over 90 million monthly active users. It has communities of interests in automotive, outdoor, power sports, home, health and technology. It offers services, including influencers/enthusiasts, lifestyle videos, why-buy videos, list videos, written content and distribution. The Company also has a particular interest in purchasing online communities in various consumer categories. Its flagship Alloutdoor content site is home to passionate outdoor enthusiasts who share their experiences, discuss gear and research product purchases on everything from fishing, to hunting to camping and more.

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VerticalScope Holdings Inc > RBC

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Post by retiredcfon Feb 29, 2024 11:33am

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Post# 35906639

RBC

Have a $13.00 target. GLTA

February 25, 2024

VerticalScope Holdings Inc

Company description

Founded in 1999 by CEO Rob Laidlaw and based in Toronto, VerticalScope is a consolidator and aggregator of enthusiast community websites focused on niche communities and hyper-specific subjects. As of 2021, the company owns 1,200+ such communities that collectively reach +100MM monthly active users.

Investment summary

VerticalScope earnings have not been immune to ongoing macro and digital advertising headwinds that could linger through 2024. Nevertheless, we continue to believe the pullback in the shares this cycle more than reflects the earnings impacts with further sequential improvement in operating and financial performance expected in Q4/23 and into 2024 driven by company-specific initiatives. Although some patience may still be required pending a more notable improvement in macro visibility and investor sentiment, we believe current levels represent an attractive accumulation opportunity given solid execution and growing traction on new products combined with a still highly profitable and FCF generative business model.

Potential catalysts for the stock

A return to mid-to-high single-digit organic revenue growth via growth in both MAUs and ARPU
A return to historical EBITDA margins
Renewed success in accretively crystalizing the M&A pipeline
Stronger-than-expected structural tailwinds
A potential takeout premium