Team Internet Share Price (TIG)

Yet still only on a current year P/E of 7.3 and hugely discounted against its peers (see my post from yesterday).

Yesterday Berenberg raised their target price to 205p (from 185p) and said Buy:

Https://investing.thisismoney.co.uk/broker-views/

It's worth reflecting on Zeus's increased forecasts and where they might take the share price (translated at $1.25 exchange rate):

Dec'26 : 29.6p EPS

Dec'25 : 25.2p EPS

Dec'24 : 22.8p EPS

Dec'23 : 18.6p EPS (actual)

And that's without any further acquisitions or share buybacks.

Edison state that TIG's global ad-tech peers trade on average P/E's of 12. And TIG's Online Presence peers trade on P/E's of 25.

If you value TIG on a relatively conservative P/E of 15 based on those numbers, and apply them to the 29.6p EPS you get to a 444p price target which could be achieved in say winter '25/spring '26 with the market looking forward as usual.

So almost 200% potential upside in around the next 18 months to two years.

Assuming TIG continue to perform smoothly, merely meeting those forecasts without surprises as they've been doing, then there should be a strong re-rating from the miserly current year P/E of 6.9 at 156.6p.

Zeus's research summary today has now been posted elsewhere, so here's some useful extracts:

"Q1 results

Revenue grew 8% organically in the trailing twelve months (TTM) to March. The Online Presence division continued to benefit from price rises and the shift toward alternative Top Level Domains (TLD), whilst the Online Marketing division continued to see declining click prices offset by visitor volumes. The company remains confident in meeting expectations for 2024, supported by new products, vertical integration initiatives and international expansion plans. We update our forecasts for the acquisition of Shinez, completed on 26 April, and lower tax rate assumptions marginally, which increases FY24 Adjusted basic EPS by 12%. Team Internet shares trade at a very attractive 5.3x FY24 EV/EBITDA, 6.7x P/E with a 15.1% FCFF yield. We believe the Group is considerably undervalued for its levels of earnings quality, growth, and cash generation."

"Shinez acquisition and forecast upgrade: On 26 April, Team Internet Group completed the acquisition of Shinez I.O. Ltd. The deal diversifies Online Marketing division revenue and expands its traffic monetisation options and capabilities (discussed on pages 4-5). The $43.2m initial consideration, funded with existing cash reserves and debt from its RCF, is equivalent to 4.2x adjusted FY23 EBITDA of $10.4m. An additional $12.3m of contingent consideration is tied to ambitious financial targets over two years, which we would expect to enhance earnings accretion if met. The deal is expected to create high-single digit percentage EPS accretion on combined pro-forma numbers for FY23, before accounting for potential synergies. As a result, we upgrade Adjusted EBITDA forecasts by 7% to $105m for FY24, by 10% to $115m for FY25, and by 16% to $131m for FY26, not including any impact of potential synergies. We also reduce effective tax rate assumptions in all years from 27.5% to 25%, driving an even greater uplift in EPS.

Valuation: Team Internet is well positioned to take market share with a full suite of products that uniquely addresses all stages of the advertising funnel from ‘Awareness’ (Shinez) to ‘Consideration’ (TONIC) to ‘Conversion’ (VGL). Despite its strong market position, its shares trade at only 5.3x EV/ EBITDA 2024 and 6.7x PE, with a 15.1% FCFF yield. In comparison, Online Presence peers trade at 10.3x EV/EBITDA 2024 and Online Marketing peers trade at 6.5x, 94% and 22% valuation premiums to Team Internet."

They've only just completed the $43.2m acquisition of Shinez, so I'd be surprised if there are any more material acquisitions for a little while.

The AGM last month renewed the authority to purchase their own shares, so I'm sure there will be more buybacks in due course.