Criteo could be attractive takeover target with upside of 40% – analyst

Promoting tech agency Criteo (NASDAQ:CRTO) could possibly be a lovely acquisition goal with upside of as a lot as 40% in a possible takeover, in accordance with a analysis report from DA Davidson earlier this month.

“As CRTO’s faster-growing Retail Media enterprise grows a bigger/bigger proportion of CRTO’s combine (18% of web revenues as of 2Q’23), we anticipate CRTO to reveal that its enterprise is extra resilient to numerous privateness/ regulatory shocks than it has been in years previous,” DA Davidson analysts wrote in a wide-ranging report referred to as “STAMPEDE” on Nov. 13. “Because of this, we imagine the correct purchaser could possibly be keen to pay between 6x-8x ahead EV/EBITDA for CRTO, implying a worth of ~$36- $46 per share in a possible take-out.”

A possible takeover comes after Reuters reported in February that Criteo (CRTO) had employed banker Evercore to discover a sale of the promoting tech agency. Criteo is not new to takeout hypothesis and although the earlier efforts (notably in 2021) did not bear fruit, buyout names have proven some new curiosity in viewers measurement and analytics (together with the October 2022 acquisition of Nielsen Holdings by Elliott Funding Administration and Brookfield Enterprise Companions).

Bloomberg reported in February 2021 that Criteo (CRTO) had drawn takeover curiosity. The corporate has had acquisition curiosity earlier than, and advert big WPP (WPP) was shut to purchasing Criteo in 2017.

Criteo (CRTO) did not touch upon the Reuters report in February, nor has it in “any significant approach” within the subsequent months, in accordance with DA Davidson.

Criteo (CRTO) could possibly be a lovely goal for both strategic or non-public fairness patrons as a result of its scale and relevance within the high-growth digital promoting and retail media house and its robust free money stream era, in accordance with DA Davidson’s evaluation.

DA Davidson has a $27 worth goal on Criteo (CRTO), implying 9% upside from present ranges.