(Tiper Stock Exchange) – Bank Profile has coverage started on the title TMP Group, an Italian tech-media company listed on Euronext Growth Milan and specialized in the design and development of communication strategies, advertising, digital marketing, and hybrid events. The target price was set at 16.5 euros per share, while the judgment on the title is “Buy“. The Milanese company made its debut on Piazza Affari at the beginning of February with a placement price of 10 euros per share.
According to analysts’ estimates, i total revenue expected to grow at a 2022-2025 CAGR of 34%, led primarily by the Experience division, with a divisional revenue split somewhat in line with FY22 results. L’EBITDA is to grow at a CAGR 2022-2025E of 34%, reaching 5.7 million euros, with a margin by 37%.
Also, they are expected FCF extension cumulative 2023E-2025 at 4 million euros – or an annual average of 1.3 million – including 3.4 million cumulative capex and 2.7 million net working capital requirement. Given the recent listing, they expect TMP to reach a net cash position of 4.1 million at the end of 2023.
Between strengths of the company the following are mentioned: process management aimed at profitability; higher margins than the competition; over 40% of turnover from recurring orders; internal know-how enabling a wide range of services; high sector diversification; advanced knowledge of digital technology; financial strength thanks to the recent capital increase.
The opportunity indicated are: strong underlying market trends, as digital and social media become the primary communication resource; fragmented competition; Metaverse and NFT platforms in worldwide development; upselling and cross selling of services; replication and scalability of the Hangar21 model in new geographical areas; external growth strategy.
The major weaknesses they are: still poorly structured processes; down, but consistent, sales from related parties; small company size which may preclude TMP from participating in tenders with stringent requirements; average collection time still too long.
Furthermore, i greater risks of the market there are: a larger company size could lead to greater complexity; need to stay “on the edge” of digital technology; maintaining significant growth could compress margins.