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 6.20 price target.
ad pepper media's final Q1 figures matched preliminary numbers. Revenue declined 15% y/y to €5.9m as restrained campaign bookings from customers due to supply chain issues as well as subdued e-commerce activity weighed on revenue development at the ad pepper media and Webgains segments. Lower sales and increased OPEX (+4% y/y) resulted in only slightly positive EBITDA (€33k) versus €1.3m in Q1/21. The net result fell from €0.7m to €-0.7m due mainly to higher financial expenses. For Q2, management is guiding for revenue of €6.3m - €6.5m, which would be up to 3% below the Q2/21 figure. 2022 looks set to be a year of normalisation following strong internet sales and online marketing growth during the pandemic. But the underlying trend of market share gains for digital marketing is still intact. Although ad pepper is not immune to declining consumer confidence, customers' supply chain disruptions, and stagflation, we still see the company as well-positioned as a digital performance marketing pure play in a structural growth sector. Good profitability, a strong balance sheet, and positive free cash flows make the stock attractive. We stick to our Buy rating and €6.20 price target.
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