Sports Media Co. Posts Stellar Q4/22

Source: Rob Goff   (3/23/23)

The Canadian firm has a “blowout” quarter of significant organic growth that calls for increases to 2023 revenue and EBITDA estimates, noted an Echelon Capital Markets report.

Playmaker Capital Inc. (PMKR:TSX.V; PMKRF:OTCQX) outperformed in Q4/22 such that revenue and EBITDA were “a large step function” above forecasts, reported Echelon Capital Markets analyst Rob Goff in a March 21 research note.

“Results across 2022 support our bullish view towards Playmaker’s organic and inorganic growth as management has assembled high-growth, entrepreneur-driven partners onto its platform, where additional investment, greater platform reach, and an in-house tech stack drive growth and monetization,” Goff wrote.

Attractive Investment Opportunity

The analyst also highlighted that Playmaker’s enterprise value:EBITDA multiple is “irrationally cheap,” and Echelon rates the company Speculative Buy. Playmaker’s current share price is about CA$0.48 per share, and Echelon’s target price on the Ontario-based company is CA$1.20 per share. This price difference indicates a potential 150% return for investors.

Noteworthy Organic Growth

Goff discussed Playmaker’s Q4/22 and full-year 2022 (FY22) revenue and EBITDA, highlighting the company’s outperformance due to the strength of its acquisitions.

Revenue in Q4/22 was US$18.7 million (US$18.7M), which surpassed Echelon’s US$11.1M estimate and consensus’ US$11.9M forecast. Likewise, Q4/22 EBITDA was beat at US$6.6M versus Echelon’s US$4.2M projection and the Street’s US$4M estimate. Goff noted these figures exclude any revenue contribution from the World Cup.

Q4/22 pro forma revenue (US$19M) and EBITDA (US$6.8M) reflect 102% and 96% year-over-year (YOY) growth, respectively.

Playmaker’s impressive organic growth in Q4/22 was due to a 25% YOY increase in overall user sessions over the whole platform, Goff pointed out. Yardbarker performed the best, achieving 86% YOY growth. Also, Wedge, the newly acquired affiliate marketer, yielded US$5.7M in only two and a half months of Q4/22, “one of the key positive surprises on the quarter,” wrote Goff.

Looking at Playmaker’s FY22 results, pro forma revenue and EBITDA came in at US$47.4M and US$15.3M and also were beat, Goff pointed out. As well they reflect YOY growth of 51% for revenue and 36% for EBITDA.

The company ended Q4/22 with US$8.9M of cash and about US$10M of undrawn credit.

Model Estimates Revised

Based on Playmaker’s “significant outperformance” in Q4/22, noted Goff, Echelon raised its 2023 revenue estimates on it by US$6.6M. The updated amount is US$50.5M.

Echelon modestly increased its forecasted EBITDA to US$15.7M from US$15.2M to allow for greater expenses as Playmaker continues growing.

Disclosures:
1) Doresa Banning wrote this article for Streetwise Reports LLC and provides services to Streetwise Reports as an independent contractor. She or members of her household own securities of the following companies mentioned in the article: None. She or members of her household are paid by the following companies mentioned in this article: None.

2) The following companies mentioned in this article are billboard sponsors of Streetwise Reports: None. Click here for important disclosures about sponsor fees. As of the date of this article, an affiliate of Streetwise Reports has a consulting relationship with: None. Please click here for more information.

3) Comments and opinions expressed are those of the specific experts and not of Streetwise Reports or its officers. The information provided above is for informational purposes only and is not a recommendation to buy or sell any security.

4) The article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility. By opening this page, each reader accepts and agrees to Streetwise Reports’ terms of use and full legal disclaimer. This article is not a solicitation for investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company mentioned on Streetwise Reports.

5) From time to time, Streetwise Reports LLC and its directors, officers, employees or members of their families, as well as persons interviewed for articles and interviews on the site, may have a long or short position in securities mentioned. Directors, officers, employees or members of their immediate families are prohibited from making purchases and/or sales of those securities in the open market or otherwise from the time of the decision to publish an article until three business days after the publication of the article. The foregoing prohibition does not apply to articles that in substance only restate previously published company releases.  As of the date of this article, officers and/or employees of Streetwise Reports LLC (including members of their household) own securities of Playmaker Capital Inc., a company mentioned in this article.

Disclosures for Echelon Wealth Partners, Playmaker Capital Inc., March 21, 2023

U.S. Disclosures: This research report was prepared by Echelon Wealth Partners Inc., a member of the Investment Industry Regulatory Organization of Canada and the Canadian Investor Protection Fund. This report does not constitute an offer to sell or the solicitation of an offer to buy any of the securities discussed herein. Echelon Wealth Partners Inc. is not registered as a broker-dealer in the United States and is not be subject to U.S. rules regarding the preparation of research reports and the independence of research analysts. Any resulting transactions should be effected through a U.S. broker-dealer.

ANALYST CERTIFICATION

Company: Playmaker Capital Inc. | PMKR:TSXV

I, Rob Goff, hereby certify that the views expressed in this report accurately reflect my personal views about the subject securities or issuers. I also certify that I have not, am not, and will not receive, directly or indirectly, compensation in exchange for expressing the specific recommendations or views in this report.

IMPORTANT DISCLOSURES

Has the Analyst had an onsite visit with the Issuer within the last 12 months? – Meeting with management/investor at Playmaker’s head office (Nov 17, 2022) – Yes.