Thursday, August 08, 2024
Patrick McCann, CFA, Research Analyst, Noble Capital Markets, Inc.
Michael Kupinski, Director of Research, Equity Research Analyst, Digital, Media & Technology , Noble Capital Markets, Inc.
Refer to the full report for the price target, fundamental analysis, and rating.
Q2 beat. The company reported Q2 results that were better than our estimates. Revenue of $828 million was better than our forecast of $812 million and adj. EBITDA of $35 million exceeded our estimate of $19 million. Figure #1 Q2 Results illustrates how the results compared with our estimates. Notably, upheaval to the business caused by the divestitures underway make for choppy near term quarterly results. In our view, investors should focus more on how the company will look after the transition.
At the trough? With adj. EBITDA margins of 4.2% in the quarter, we believe the company’s results are roughly at a trough. Management indicated that margins will likely improve sequentially in future quarters as the company eliminates post-divestiture cost redundancies and executes its cost-saving strategies.
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