EVC - Entravision Communications (EVC) - A Strong Growth Digital Media Company Below A Radio Multiple

Strong finish to 2021. Q4 2021 revenue was $233.9 million, beating our forecast of $226.1 million. Adj. EBITDA was $32.5 million, beating our estimate of $30.3 million. All three of the company's segments contributed to the stronger than expected results.Digital remains strong. Digital Media accounted for 76% of total company revenue. Digital cash flow margins also improved in 2021. Cash flow margins for the year were 6.7% compared with 4% in 2020.Revising estimates upward. Given the company’s compelling Digital revenue growth, we are upwardly revising our full year 2022 revenue and adj. EBITDA forecast. Our 2022 revenue estimate is raised from $868 million to $940 million and our adj. EBITDA estimate from $90.3 million to $93 million. We anticipate that full year 2023 revenue will approach $1 billion and adj. EBITDA of $100 million. Instates a stock repurchase authorization. As of December 31, 2021, the company had $185.1 million of cash and equivalents and $212.3 million in long-term debt. The large cash balance and sizable free cash flow generation provides financial flexibility to make strategic stock repurchases and seek accretive acquisitions. Raising price target. Near current levels, the EVC shares trade at a modest 5.1 times Enterprise Value to our 2023 adjusted EBITDA estimate, below the company's historic 5 year trading ranges of 7.3 to 13.3 times and well below Radio multiples. We are raising our price target from $13 to $15 to reflect the company's above average adj. EBITDA growth and reflect the value of its burgeoning Digital businesses. Read More >>