Pantelakis Securities initiated coverage in Alter Ego Media (AEM) with an “overweight” recommendation, setting the target price at 6.20 euros per share, implying an upside potential of 35% compared to current closing price.
Pantelakis Securities estimates annual revenue growth for 2024 and 2025 of 15.6% and 6.1% respectively. Also, in terms of operating profitability, it expects EBITDA 2024 at 46.5 million euros, as well as EBITDA 2025 at 53.0 million euros, with annual growth rates of 36.8% and 13.9% respectively.
Furthermore, in terms of net profitability, the brokerage firm expects 9.7 million euros for 2024 with an annual growth rate of 150%, as well as 17.1 million euros for 2025 with an annual growth rate of 34.8%.
The increased estimated profits come from the growth of the advertising market in Greece, the optimization of content costs and the company’s high operating leverage. Alter Ego Media is transforming from a large traditional media group into a “media-tech” group. The brokerage adds that the next steps for the Group are additional investments in content, the creation of a streaming platform and the development of a subscription package for the Group’s media.
Emphasis was made that the Alter Ego Media group is “very well-positioned” with regards to the global trends that dominate the media industry and the new consumer habits that target digital/subscription services.
Additionally, it is noted that given the Group’s strong cash position, management is in a good position to proceed with strategic acquisitions aiming to diversify or strengthen the existing portfolio, which according to the analyst would further upgrade the key estimations of the current report.
The company’s valuation was based on the average of two methods consisting of the discounted cash flow (DCF) and the market multiples methods. According to the brokerage firm calculations, even at the target price of 6.2 euros the share will trade at a 22% discount compared to similar companies abroad.
