Currency in EUR
Last close As at 22/09/2023
▲ −0.46 (−2.32%)
CLIQ Digital sells subscription-based streaming services that bundle movies and series, music, audiobooks, sports and games to consumers globally. In FY22, 37% of sales were generated in Europe, 57% in North America and 6% in other regions.
Demand for mobile entertainment has grown rapidly over the last decade, boosted by increased smartphone penetration, now at 84% of the global mobile users (Statista). While boundaries between types of content are becoming increasingly blurred, mobile gaming is the largest segment. The larger content subscription services have been struggling to maintain momentum in their subscriber base and have been pushing up subscription prices and limiting password sharing to protect revenues.
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CLIQ Digital delivered robust growth in H123, with 37% y-o-y growth in both revenue and EBITDA at a maintained margin of 15.8%. Growth continues to be driven by marketing spend and investment into evolving the bundled content offering. Given a more competitive bidding market, management is focusing on acquiring customers with a higher lifetime value to create a more profitable subscriber base. Management has reiterated both its FY23 and mid-term FY25 guidance and our headline forecasts remain unchanged. Despite CLIQ’s share price performance faring better than the peer average valuation, it remains at a significant discount to peers on both EV/sales and EV/EBITDA multiples. In our view there continues to be significant upside to the current share price on our current estimates.
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