AT ReviewAcuityAds (TSX:AT) Click here to download the investor presentation www.AcuityAds.com Average Analyst Price Target: $3.30 (Covered by Haywood, Echelon, Paradigm, VIII Capital, Cormark Securities)
- Despite a strong financial performance over the course of 2019, Acuity’s share price has lagged significantly. Throughout most of Q4 2019, the stock traded around the $75m market cap, representing an estimated 0.7x 2019 EV/Sales compared to other ad-tech competitors trading at an average of 4.3x 2019 EV/Sales.
- However, towards the end of Q4 2019 and into the beginning of 2020, the share price has begun to pick up as the market begins to recognize the excellent performance of the company. The stock has already appreciated ~30% since the end of 2019 and remains significantly off from analyst target prices.
- While we await Q4 2019 results and look ahead to FY2020, markets are anticipating one very significant milestone from AcuityAds: Profitability. After crossing the $100m revenue mark, it is our view (and we believe that of the market as a whole) that investors expect the company to demonstrate the long-term viability of the company through showing a true net income. As well, we believe 2020 is the year that the company begins to address its debt-level in conjunction with profitability.
- Based on the conversations towards the end of Q3 2019, management believes that its new technology developments will help further improve gross margin and generate significant revenue. In our view, this is the key to accomplishing both profitability and reducing debt levels as traditional ad-tech quickly becomes commoditized and the likelihood of success directly becomes a function of superior technology – a factor that has led to Acuity’s operational success to date.
- Potential Catalysts Include:
- Profitability
- Significant additional contract wins
- Additional M&A
About AcuityAds: AcuityAds is a leading technology company that provides marketers a powerful and holistic solution for digital advertising across all ad formats and screens to amplify reach and Share of Attention® throughout the customer journey. Via its unique, data-driven insights, real-time analytics and industry-leading activation platform based on proprietary Artificial Intelligence technology, AcuityAds leverages an integrated ecosystem of partners for data, inventory, brand safety and fraud prevention, offering unparalleled, trusted solutions that the most demanding marketers require to be successful in the digital era.
AcuityAds is headquartered in Toronto with offices throughout the U.S., Europe and Latin America. For more information, visit
AcuityAds.com.