One-glance verdict
Undervalued
$31.45 our estimate vs market $8.79
Wall Street consensus: $14.34 (-54.4% lower than our fair-value estimate)
72% below our estimate, below the bear case
Fundamentals snapshot
Nexxen International Ltd.
NEXN · NGM · Communication Services · Advertising Agencies
Current price
$8.79
52-week range
$5.60 - $11.30
Market cap
$500.60M
Balance sheet
Healthy
14.75x Strong cushion
Net cash $95.31M. Interest coverage shows how many times profit covers the interest bill.
What stands out
2 Rewards
2 Risks
2 rewards · 2 risks
- Reward Returns 2.7% on equity, ahead of 40% of its peers.
- Reward Free cash flow was positive in 4/10 years.
- Risk Stock trades 109.9% above its 5-year average P/E.
- Risk Operating margin compressed from 15.1% to 4.1% over 3 years.
What this company does
Nexxen International Ltd.
Nexxen International Ltd. helps companies advertise their products by providing a technology platform that connects advertisers with places to show their ads, like websites and apps. The money they make primarily comes from these advertising campaigns, and it matters because it shows how well they are reaching and engaging customers in the fast-changing world of online ads.
How the company got here
Nexxen International Ltd., formerly known as Tremor International Ltd., was founded in 2007 and is headquartered in Israel. The company rebranded to Nexxen in January 2024, signaling a new chapter focused on its integrated advertising technology platform. This name change reflects its evolution from a collection of advertising tools to a unified, end-to-end solution for brands and publishers. The company's journey has been about building and integrating various components of the digital advertising ecosystem to offer a comprehensive service.
What it actually does
Nexxen operates a video-first advertising platform that helps businesses and content creators run and manage their advertising campaigns. Think of it as a sophisticated toolbox for companies that want to show ads to people online, especially through video content. It provides the technology for advertisers to reach their desired audiences and for publishers (like websites or apps that show ads) to sell space for those ads. The platform aims to make advertising more efficient and effective by using data and artificial intelligence.
Demand Side Platform
This part of Nexxen's business is like a control center for advertisers and their agencies. It allows them to plan, launch, and manage advertising campaigns across different online channels (omni-channel). Advertisers get access to ad space (inventory), data to find the right people to show ads to (audience targeting), and tools to help them create and test their ads. This segment is crucial for ad buyers looking to optimize their spending and reach specific customer groups.
Data Platform
The Data Platform is where Nexxen helps clients make sense of information to improve their advertising. It provides insights and recommendations by analyzing various types of data, such as demographics and user behavior. This allows advertisers and publishers to combine their own data with Nexxen's to better understand their audiences and make their campaigns perform better, ultimately aiming for a higher return on investment (ROI).
Supply Side Platform
This segment serves digital publishers, such as websites and app developers, who have space to show advertisements. It's a self-service tool that helps them sell their ad space (inventory) efficiently through an automated auction process called real-time bidding. This allows publishers to maximize their earnings from ads shown on various devices, including mobile phones, smart TVs, and computers.
Nexxen Discovery & Studio
Nexxen offers additional services to enhance advertising efforts. Nexxen Discovery is a product that helps clients understand their audiences better and create targeted groups of people to show ads to, optimizing campaigns in real-time. Nexxen Studio is an in-house creative team that designs and produces digital advertisements tailored to the specific needs of brands and agencies, ensuring the ads are visually appealing and effective.
What management is betting on now
Nexxen's management is focused on integrating its various advertising technology offerings into a single, cohesive platform. The strategy centers on being a 'video-first' end-to-end solution, meaning they prioritize video advertising while providing a comprehensive suite of tools for both advertisers and publishers. By leveraging data and artificial intelligence, they aim to simplify the complex digital advertising landscape, improve campaign performance, and drive growth through innovation and strategic partnerships, such as their collaboration for political advertising.
Price history
How the share price has moved
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Is it cheap or expensive?
Fair value $31.45 vs current price $8.79
Wall Street consensus is the average analyst price target: $14.34 (-54.4% lower than our fair-value estimate).
Our most-likely fair value is $31.45 a share — about 257.8% above today's price of $8.79, so the stock currently looks cheap (undervalued).
Is it drowning in debt?
Healthy
Net cash $95.3M - more cash than debt. Interest coverage 14.7x.
Net debt
$-95.31M
Interest coverage
14.75x
Nexxen International Ltd.'s profit covers its interest bill about 14.7 times over. which is stronger than every peer shown here and 2 peers sit below 1x, which is the danger zone where profit does not fully cover the interest bill.
Healthy
Worse cushion
Baseline
Better cushion
NEXN
BASELINE
Nexxen International Ltd.
Total debt $36.73M Interest coverage 14.75x This is the baseline the peer rows are being compared against.
Total debt $40.91M Interest coverage -3.16x -100% vs NEXN This peer has almost no interest-payment cushion compared with NEXN.
Total debt $22.09M Interest coverage -20.30x -100% vs NEXN This peer has almost no interest-payment cushion compared with NEXN.
Total debt $416.98M Interest coverage 5.17x -65% vs NEXN Carries about 2.9x less debt cushion than NEXN.
Total debt $157.40M Interest coverage 9.38x -36% vs NEXN Carries about 1.6x less debt cushion than NEXN.
What you should know
The case for and against NEXN
2 Rewards
2 Risks
Rewards
-
Returns 2.7% on equity, ahead of 40% of its peers.
-
Free cash flow was positive in 4/10 years.
Risks
-
Stock trades 109.9% above its 5-year average P/E.
-
Operating margin compressed from 15.1% to 4.1% over 3 years.
The numbers
All the key metrics, grouped by purpose
Tap any ? icon to learn what it means.
Valuation
How expensive the stock looks
P/E (TTM)
39.95x
Forward P/E
7.08x
P/B
1.12x
P/S
1.31x
EV/EBITDA
7.58x
PEG ratio
0.65x
Profitability
How much profit each dollar creates
Gross margin
82.5%
Operating margin
4.1%
Net margin
3.4%
ROE
2.7%
ROA
1.6%
Health
Liquidity and balance-sheet strength
Debt / equity
0.08x
Current ratio
1.26x
Quick ratio
1.26x
Total debt
$36.73M
Total cash
$132.04M
Growth
How the business has been compounding
Revenue TTM
$382.86M
Revenue 5Y CAGR
2.9%
EPS TTM
0.22
EPS 5Y CAGR
11.0%
Cash flow
How much cash the business throws off
Operating CF TTM
$110.11M
Free CF TTM
$80.41M
FCF margin
21.0%
Dividend
Shareholder payout
Yield
0.0%
Payout ratio
0.0%
Last ex-div date
2018-09-20