illumin Holdings Inc T.ILLM

Virtus Advisory Write up

[Wallstreetjack]

AcuityAds (TSXV:AT)
 

• Acuity has shown two strong quarters of growth in Q2’18 and Q3’18 leading us to believe that the company is back on track to growth. Despite this, the market has yet to reward the company for consecutive quarters of growth and two successful acquisitions in 2018.
• Having developed one of the most comprehensive digital marketing platforms on the market, and as the programmatic advertising market continues to grow, Acuity has been positioning itself to continue to capture a large chunk of market share in 2019.
• While Q4 revenue has yet to be announced, average analyst targets for the quarter was recently increased to $24.75m of revenue with Adjusted EBITDA target of $2.7m.[1] This would represent revenue growth of 92% from the previous quarter.
• Furthermore, average analyst 2018 revenue target is $62.05m with average analyst 2018 Adjusted EBITDA target of $2.4m.[2] The company noted that revenue in October 2018 alone was greater than all of Q1 2018 – a highly bullish sign.
• Acuity continues to add clients both organically and through acquisition and we anticipate this to continue over the course of 2019. Average analyst 2019 revenue target is $84.7m with average Adjusted EBITDA target of $8.45m.[3]
• Currently, the stock is trading at ~0.6x 2019 sales which, by analyst’s standards, suggests a buy rating, particularly when considering the company is anticipated to grow revenue by 36% in 2019. Average analyst price target is $2.14.
• Potential catalysts include:
  • Q4 2018 Results and revenue and EBITDA beats
  • Additional M&A
  • Further acceleration in growth

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[1] Analyst projections include: Haywood, Echelon, Paradigm and VIII Capital

[2] Analyst projections include: Haywood, Echelon, Paradigm and VIII Capital

[3] Analyst projections include: Haywood, Echelon, Paradigm and VIII Capital


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