Criteo (CRTO): Raising PT 26% After A Solid Quarter With Hidden Growth Accelerators - Berenberg

November 25, 2016 8:00 AM EST
Get Alerts CRTO Hot Sheet
Price: $43.94 +0.27%

Rating Summary:
    15 Buy, 4 Hold, 0 Sell

Rating Trend: Up Up

Today's Overall Ratings:
    Up: 18 | Down: 18 | New: 11
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Berenberg analyst, Sarah Simon, reiterated her Buy rating on shares of Criteo S.A. (NASDAQ: CRTO) after Q3 results were well ahead of expectations.

Despite market fears, Criteo delivered strong Q3 results, with revenue ex-traffic acquisition costs (TAC) of $177m (up 30% underlying) versus guidance of $170m-174m. Meanwhile, EBITDA came in at $54m versus consensus of $45m. The stronger-than-expected margin reflects the operating leverage inherent in Criteo’s core business of display-based retargeting.

While these were strong results, and we have increased our base-case estimates, Criteo has a number of other opportunities that have hitherto not been factored into our estimates, or those of consensus. These include China, Search and HookLogic. On our estimates, which we believe are conservative, these three opportunities could drive additional EBITDA of $184m by 2020.

The analyst increased core fair value by $1, and added in the present value of new opportunities, which amounts to $12/share. This takes the price target to $63 from $50.

For an analyst ratings summary and ratings history on Criteo S.A. click here. For more ratings news on Criteo S.A. click here.

Shares of Criteo S.A. closed at $42.64 yesterday.

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