Ubika Research has put out a report on Qyou Media (TSXV: QYOU) this morning, announcing coverage while simultaneously rating it as a “buy” and giving the equity a price target of $0.30. The report and corresponding price target is heavily predicated on the India-focused content producer now entering its fourth stage of development, which is monetization.
Qyou Media, as Deep Dive readers are aware, is primarily focused on the opportunity provided by the growing Indian population in terms of content consumption. The firm launched Qyou India in 2017, which is focused on providing video content via linear television channels and video-on-demand (VOD) services to Millennial and Generation Z viewers. The company has partnered with numerous local social influencers to present original short-form content to its viewers.
The report published by Ubika Research this morning highlights the large market opportunity presented in India, with the Entertainment segment expected “grow at an annualized rate of 12.4% through to 2021E,” which compares to the global average of 4.2%.
The buy rating, and corresponding price target of $0.30 for the equity, is based on average across three valuation models for the firm. Primarily, the firm is trading at a 0.7x multiple of its 2022 estimate revenue, which is the lowest multiple among peers. The report also identifies that Qyou trades at a 5.2x multiple of its estimated fiscal 2022 enterprise value to EBITDA (EV/EBITDA), which is also the lowest amongst peers. The peer group averages 1.8x and 5.4x, respectively, for these figures.
Finally, the valuation and subsequent rating is also predicated on the lack of investor access to the booming Indian media market. Rather than only being available to large-cap media entities, Ubika has stated that the Qyou opportunity allows “investors a way to immediately participate in the explosive TV, digital media, OTT/streaming industries that would otherwise be unavailable.”
The full research report, published by Ubika Research, can be found here.
Qyou Media last traded at $0.06 on the TSX Venture.
FULL DISCLOSURE: QYOU Media is a client of Canacom Group, the parent company of The Deep Dive. The author has been compensated to cover QYOU Media on The Deep Dive, with The Deep Dive having full editorial control. Additionally, the author personally holds shares of the company. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security.
