illumin Holdings Inc T.ILLM

Alternate Symbol(s): ILLMF

Communication Services

illumin Holdings Inc. provides a journey advertising platform, which enables marketers to reach consumers at every stage of their journey by leveraging advanced machine learning algorithms and real-time data analytics. It enables advertisers to connect intelligently with audiences across online display, video, social and mobile campaigns. Its Programmatic Marketing Platform, powered by machine learning technology, is at the core of its business, accompanied by patented solutions for analytics-led video and mobile targeting that leverages data. It enables marketers by offering near real-time reporting and analytics, bringing accountability to programmatic advertising to deliver business results and help solve the challenges that digital advertisers face. Its illumin software offers advertising automation technology that offers planning, media buying and omnichannel intelligence from a single platform.

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Post by retiredcfon Jul 27, 2023 10:35am

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Post# 35559473

TD

Clearly their target (and possibly their recommendation) will change in the next couple of weeks. GLTA

illumin Holdings Inc.

(ILLM-T) C$2.55

Substantial Issuer Bid Announced Event

July 27, 2023

Recommendation: HOLD

Risk: HIGH

12-Month Target Price: C$2.50

12-Month Dividend (Est.): C$0.00

12-Month Total Return: (2.0)%

Preliminary Q2/23 results, and the company announced a substantial issuer bid (SIB) to cancel up to 15.8 million shares for up to $40mm, as well as its intent to delist from the Nasdaq (see press release here – link). The SIB will be carried out via Dutch Auction, with a minimum and maximum range of $2.53 to $2.65 per share. The deadline to tender shares is August 30.

Impact: POSITIVE

Given that illumin had over $80mm in cash as at the end of Q1/23 with no outstanding debt, and is guiding for $88mm of net cash as at the end of Q2/23, there is ample balance sheet capacity to cover the SIB as well as continue to invest in the underlying business. We believe it is accretive to return cash to shareholders in this way, particularly since the SIB is being offered at higher range than where the stock had been trading for the majority of 2023. Although this news implies acquisitions are unlikely in the near term, we believe it supports management's recent confidence in the organic growth turnaround of the illumin self-serve platform (as detailed in our Q1 recap here – link).

Given that the range of the SIB is above our current target price, and given that Q2 results appear to be mixed versus our estimates (revenue a bit ahead and EBITDA a bit below, as outlined below), we believe investors should consider tendering into this SIB.

Revenue: $33mm versus our estimate of $31mm and Q1/23 of $27mm.
illumin self-serve revenue: $5.4mm, a material step up from $2.2mm in Q1/23 and $2.4mm/$1.2mm/$0.5mm/$0.1mm in Q4/Q3/Q2/Q1 of 2022.
EBITDA: $20k versus our estimate of $2mm and Q1/23 of ($1.3mm).
We will revise our estimates concurrent with full Q2 results, expected on August 10.