N+1Singer 533p Target2 Oct 2018 14:59
26 Sep 2018
Trimming numbers, but profits are leaping
Rhythmone | RTHM | 208 -14.6 (-3.3%) | Mkt Cap: 163.3m
N+1 Singer
Johnathan Barrett
3 pages
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Alongside the CFO change announcement, RTHM included a compact update on trading. While H1 revenues are off plan (weak Performance market and integration disruption), lasting effects look likely to be modest and the biggest implication of H1 EBITDA guidance is that costs have been reduced much faster than expected, providing comfort for the full year. EBITDA looks set to continue to soar and investors are likely to focus on H1’19 EBITDA progress; c$20m compares very favourably with $3.1m in H1’18 and $14.0m for all of FY18. Our new FY19 forecast is for $48m. The stock trades on just 3.6x FY19 EV/EBITDA. We adjust our TP to 533p (was 730p) implying investors can more than double their money. BUY.