Audio-visual tech company AD8 delivered a very strong 1H result last month, propelling the stock to new all-time highs. Revenue grew 48% to $US30.4m, with EBITDA $US10.1m being a whopping ~70% ahead of expectations driven by strong revenues, plus margins improved ahead of consensus. While the first half was strong, the company left guidance unchanged, but the market thoroughly embraced the results. Moving forward, they are looking at M&A opportunities with a strong cash balance of $117m, which supports our view that this is a business going places. We can see a period of consolidation on the horizon, but we believe AD8 is a case of “buy the dip” until further notice.
- We are not planning on taking profit on AD8, even though a 160% paper gain is eye-catching – MM owns AD8 in our Emerging Companies Portfolio.
MM is long and bullish AD8
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