Acuity Ads(AT) has been in Halifax for some time.It was an old style advertising company.But it has gone into the online advertising business in a big way.It released it's Q1 2021 results on November12 and the results were good but investors have moved the stock price from $2 to $7.75 and the market capitalization from $75 million to $360 million for other reasons.This blog recommended in a blog on Wordpress (Blogdaleup) on October 30,2019 to meet with and combine with 3 junior online advertising companies namely,Unbounce,Sortables and Scribbles Live.And the stock price went from $2 to $7.75 in 2020;and the market capitalization from $75 million to $360 million.As AT has much more potential for growth now.Is it possible that there is room for another small acquisition?Well in November AT raised $20 million in equity with 3.5 million shares at $6.10 which is well above their $2 share price in January of 2020.Acuity Ads has bounced back with style.
Q3 Highlights
This was not a hugely successful quarter but it was an improvement over Q1 in 2020.Revenues were $26 million for a 3% decrease over 2019.Acuity Ads management says the decrease was because of the pandemic.However their gross profit margin increased from 48% in 2019 to 52%.And adjusted EBITDA increased 150% from $1.6 million in 2019 to $4 million.While net income was $1.9 million compared to a net loss of $1.4 million in Q3 2019.
Nine Months
AT had a good Q3 but performance was good for the entire 9 month period.This blog believes it's the change in structure caused partly by the new acquisitions that buoyed the financial results.For example,TV revenues increased by 353% over Q3 of 2019.And it launched a self-serve platform that will contribute to Q4 revenues. Consequently adjusted EBITDA was $8 million for 9 months compared to $3.7 million for 2019 for a 115% increase. And there was a net loss of $.5 million compared to a net loss of $7.6 million in 2019.
Consolidation
This blog believes that all 3 of the proposed small tech. companies should be acquired because all 3 have specialized talents in online advertising operations.AT's recent increase in share price makes it easier to raise the cash required to do so.But all 3 must be merged in a way that is most efficient.Once this is done this blog sees the possibility for AT's price to move from it's present price range to the $13-$15 price range.It still will have a long way to go to catch up to other online technology companies like Mediagrif.But with Acuity Ad's new platform some of these second tier companies are within range. https://www.zacks.com
