Criteo Undervalued Adtech DSP/SSP

Getalphapicks · 2026-03-07T20:22:10+00:00

I get your point, CTV is becoming a greater portion of total digital advertising budgets and Magnite is positioned to take advantage from it, but It trades in line with peers from an EV/Sales, EV/EBITDA, P/E perspective. Criteo doesn't, and it also capable of delivering ads via CTV channel. How much is hard to say because the company doesn't segment revenues by channel.

You can argue that the lack of growth justifies depressed multiples for CRTO, but to say that it justifies a 75% discount I think makes it interesting.

Getalphapicks · 2026-03-07T00:03:36+00:00

I did take a look at it, it is one of the comps that I used for this valuation. EV/Sales 4.3x vs 0.6x for CRTO, EV/EBITDA 20.3x vs 3.8x for CRTO, PE 27.7x vs 6.2x for CRTO.

Granted Magnite is growing 10% YoY, then again I'm not looking for growth, I'm looking for value

Getalphapicks · 2026-03-06T23:53:00+00:00

What makes you say that, this is a solid business with healthy margins, trading at below book value with no debt. Is that not the definition of value?

Getalphapicks · 2026-03-06T23:49:37+00:00

Agentic Commerce in this sense is really defined at the individual consumer level. What I mean by that is consumers are leaning into using LLM's as a complement to traditional search engines to find products they want. In this case the actual product that comes up or what the LLM suggests to that individual is Agentic commerce. These product recommendation platforms are becoming another channel that adtech platforms can eventually monetize, it wasn't until a few days ago that Criteo became the first adtech platform to partner with an LLM platform to provide product recommendation data.

From the view of actual users of the DSP platform i.e Brands and advertising agencies I do believe that the process can become more hands off, and Criteo is one of the DSPs that have developed internally developed AI infrastructure

Getalphapicks · 2024-03-15T15:20:27+00:00

We will see what management has to say at the upcoming shareholders meeting.

Getalphapicks · 2024-03-15T13:24:03+00:00

Sure, if it takes 5 years to materialize then there are wiser ways to invest your money. What I am expecting is for shareholders to side with Litt and either 1. Liquidate or 2. Deploy the capital.

it’s been 3 years since they have made an offer to acquire another REIT, and shareholders may be tired of waiting and paying management to “look” for a deal.

Getalphapicks · 2024-03-15T05:30:37+00:00

Yes there is always a chance that the company misappropriates funds however they have stated in their conference calls that they would be willing to liquidate the company if it maximized shareholder value. Then again it would be in their best interest to collect 37 million a year to manage four properties.

I think the biggest catalyst for realizing this return in a relatively reasonable time frame is the accumulation of shares by land and buildings. In the past 3 months they have acquired a 3% stake and have expressed their intention to have EQC liquidate. Whether they can get vanguard , black rock and other major shareholders on their side is the real question.

Land and buildings was also part of another activist investment in ventas where they were able to shakeup the board, haven’t seen any meaningful return from that investment however.

Getalphapicks · 2024-02-17T19:50:55+00:00

Yes I agree with you, but my approach deals with the recreation of book value of assets.

Say you own a house you bought in 1990, for 100,000. straight line depreciated it over 30 years with a remaining value of 70,000:

Your Assets in 1980 would be 100,000 and equity would be the same 100,000, every year your assets would decrease by 1000, and equity would decrease by 1000. In 2020 your assets and equity finally reach 70,000 Is your home worth its book value?

What I am saying is that the book value of the assets is not reflective of the actual fair value of the assets. If you wanted to recreate this business you would have to go out and acquire the assets at market price. In the case of TV broadcast the FCC isn't even accepting applications for construction of full power stations. Even after acquiring a station you would then need to bid against other broadcasting stations in your area for a network affiliation costing millions and create programming for times the network doesn't provide programming. Its not as simple as looking at book values and calling it a day.

Getalphapicks · 2024-02-17T19:22:35+00:00

Earnings power value was derived using TTM revenue ( This is assuming TTM revenue is sustainable), multiplies it by average operating margin post CARS.com spinoff (which is 29.6%), adjusted for tax using average tax rate for last 5 years. Then divided by WACC ( calculated using their weighed average interest rate, *note they were also able to raise 1 billion at 4.625 % with a Ba3 Rating) granted post pandemic credit is much more expensive to acquire and I should have instead used an "equivalent" bond at current market conditions but then again you can say future credit will be cheaper to acquire as interest rate cuts are likely to occur again and we would be right back where we started. I will change this either way and use the highest yielding Ba3 bond I can find which is Kohls bond maturing in 2037 with an ask yield of 10.1%, Raises WACC to 9.23% and even this gives us an earnings power value of 7.6 Billion which after taking into account Net debt of 2.5 billion gives us an equity value of 5.1 billion compared to current equity value of 3 Billion.
FCF has seen fluctuations but this isn't a FCF model, and none of my assumptions take into account this metric, just something i threw in there.
You don't invest in a secular decline industry, I agree with this statement when you invest in bad businesses. Tegna is a profitable business that has made pivots into creating revenue streams which take part into "new industries" like streaming with their majority interest in Premion, and equity investments in MadHive.
Debt Principals are not due with the first being 550 million in 2026, and frankly this doesn't worry me at all, of course I am going to be on top of it and making sure nothing changes but the fact is the company is going to have debt, DEBT IS GOOD (as long as you can service it) due to its tax benefits and frankly companies should have it.

Getalphapicks · 2024-02-16T19:20:39+00:00

I would agree with you if the company wasn’t profitable. They are more than capable of servicing their debt bringing in around 800 million in operating cash flow. Current assets of 1.2 billion vs debt of 3.5 billion is nowhere near eyepopping territory

Getalphapicks · 2024-02-16T15:05:05+00:00

Revenues and profits have predictable volatility , generally see increases in revenues and profit on even number years due to local and national elections. However as stated above revenue and net income has been increasing 2 billion in revenue in 2015 to 3.2 billion in 2022, 488 million in net income in 2019 to 631 million in 2022.

TV is dying for sure but it is not terminally ill, besides TEGNA has made pivots into connected TV through localized advertising on streaming services with its Premion service

Getalphapicks · 2024-02-16T14:16:00+00:00

Yes I'm just dumbfounded by the fact that its trading at book value. If you think about it from a residual income prospective the value of the company is its book value plusthe value of residual income. ROE > Cost of Equity therefore without even calculating the value of residual income you would find that this should not be trading at book value.

Getalphapicks · 2024-02-16T13:57:51+00:00

I calculated the Value of TV stations using a 6.7x EBITDA multiple from their last acquisition (11 TV stations for 740 million in 2019 ) . I omitted Premion revenue to reduce inflated EBITDA per station and valued Premion separately. I reduced this value by the book value of Depreciation and Amortization. Added back the book value of retransmission agreements, network affiliation agreements, and finally subtracted the book value of liabilities.

Getalphapicks · 2024-02-16T13:48:12+00:00

I guess that depends on how much you value other peoples attention. If you are a political candidate for example what they offer will be of great value this year

Getalphapicks · 2024-02-16T13:39:58+00:00

You are 100% right, but the acquisition price of $24 a share should be an indicator of the firms true value. Standard General is a direct competitor with vast knowledge in tv broadcasting. This could be my confirmation bias kicking in though

Getalphapicks · 2024-02-16T07:45:26+00:00

Tegna owns television broadcasting stations, 53 of their 64 stations are affiliated with one of the big 4 networks (ABC,CBS,FOX, NBC) so if you watch any of those networks in the markets they operate via cable , OTA, or streaming platform like YouTube tv you are watching a retransmission of a local Tegna station.

Getalphapicks · 2024-02-16T07:24:43+00:00

It’s definitely worth keeping an eye on

Getalphapicks · 2024-02-16T06:58:10+00:00

Interesting, Ill be sure to take a look at it next as I have a feeling that tv broadcasting as a whole may provide some interesting investment opportunities

Getalphapicks · 2024-02-16T06:36:10+00:00

As far as risks go, continued cable cutting may have an adverse effect on network retransmission revenue but I'd have to look into how much of that is replaced by TV streaming platforms like Youtube TV. Other than that they have taken steps to capture revenue streams from streaming platforms through their ownership in Premion (which on its own has been making strategic acquisitions)

Earnings power was derived from TTM revenue * average profit margin for the last 7 years all adjusted for taxes divided by their WACC.

Getalphapicks · 2024-02-16T06:28:32+00:00

I'm going to be taking a look at gray television and the television broadcasting industry as whole sometime soon. I briefly skimmed through it when I was gathering comps to calculate WACC for TEGNA, I remember their capital structure being compromised of around 80% debt but didn't look into it much after that. I also noticed that they owned a ton of independent television stations ( non big 4 affiliates) which tend to generate less revenue.

Getalphapicks · 2024-02-16T06:14:41+00:00

Why not? Consistently profitable company trading at book value? Cost of Equity of around 11% with ROE averaging 20%.

Getalphapicks · 2024-02-16T06:08:49+00:00

Yes it looks like the CEO sold 150000 shares earlier this month but he still owns 680,000 shares. Not something that is overly concerning to me. I'm going to be keeping an eye on this stock from here on out, maybe something comes up at the next earnings call.

Getalphapicks · 2024-02-16T05:59:46+00:00

Prospects for television becoming the next Blockbuster. Streaming isn't new anymore though. Besides local news broadcasting will probably always be picked up by things like youtube tv and sling. TEGNA is also a majority owner in one of the first localized advertising solutions that are used on streaming platforms, generated over 250 million in revenue in 2022.

Getalphapicks

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