Edison Investment Research Limited: Media and Games Invest (M8G): Initiation - Focus on ad software platform

London, UK, 15 July 2022

Media and Games Invest (M8G): Initiation - Focus on ad software platform

Media and Games Invest (MGI) is grasping an opportunity to leverage its extensive first-party data resource, generated through its games content, to build out a full stack advertising software platform that can offer good returns to both advertisers and publishers. Changes to the advertising ecosystem to protect user privacy are prompting a strategic shift to first-party data, with added benefits of improved targeting and transparency. MGI has already assembled a strong offering on the supply side and is now expanding its offering on the demand side, through organic growth and targeted M&A, which should generate further scale and efficiency.

The share price has fallen by roughly 50% year-to-date, while global adtech peers have fallen by 47% on average, reflecting the market rotation away from high-growth sectors. The quoted gaming companies have done a little better, falling by 16%. MGI’s shares are valued below both sets of peers. If they were to trade at parity on average across FY21–23, the price would be €5.06, ahead of the level derived by a DCF (€3.92) and above the price at which they started the year.

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