London, UK, 8 March 2023

Media and Games Invest (MGI): Sharpening focus in digital advertising

MGI – Media and Games Invest is increasingly focused on its vertically integrated multichannel advertising platform, retaining a core of games that serve to generate first-party data and provide an efficient sandpit for developing new services. FY22 results were at the top end of guidance (as revised upwards at Q322), despite the headwind of lower market advertising rates. This scenario has continued in Q123, and we have taken a cautionary approach to our revised FY23 forecasts, which will be reviewed when management issues guidance for the year at the Q1 update. Medium-term guidance remains for a revenue CAGR of 25–30%. The shares are valued well below peers and the level indicated by a discounted cash flow (DCF).

MGI’s share price is down 6% year-to-date, versus global adtech peers up 6% on average, with quoted gaming companies posting average gains of 4%. MGI’s shares are valued below both sets of peers. Parity averaged across FY22–24 EV/sales and EV/adjusted EBITDA would imply a share price of €3.50 (was €4.43 in FY21–23), with a DCF indicating a value of €3.80 (was €4.21).

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