First Berlin Equity Research has published a research update on ad pepper media International N.V. (ISIN: NL0000238145). Analyst Dr. Karsten von Blumenthal reiterated his BUY rating and maintained his EUR 3.50 price target.
ad pepper (APM) has reported Q2 revenue and EBITDA, which were in line with guidance and our forecasts. Revenue declined 8% y/y to €5.4m. However, EBITDA improved slightly from €-186k to €-118k. This shows that cost savings more than offset the revenue contraction. Despite the still challenging macro-economic environment, APM is cautiously optimistic for H2 because of a tentative recovery of customers‘ e-commerce and advertising activities and the initiated cost savings. We expect H2 to be stronger than H1 and stick to our forecasts. We believe that the main share price driver will be the planned purchase of a majority stake in solute Holding GmbH & Co. KG (solute), a leading price comparison portal business in the German market (billiger.de and shopping.de). If APM succeeds in consolidating solute, it would transform into a company with almost €60m in revenue and >400 employees. An updated DCF model, which does not yet incorporate the planned transaction, yields an unchanged price target of €3.50. Our rating remains Buy.