Shares of Audioboom Group PLC (AIM: BOOM) surged in early trading today after the company reported a record number of advertising impressions and confirmed its yearly financial forecast.
By 10:00 AM, the company’s shares on the London Stock Exchange had jumped 21.5% to 182.25p.
The surge was triggered by the podcast publisher, which is ranked as the fourth largest in the US by Edison Research, announcing over a billion ad impressions for October.
In the previous month, Audioboom achieved its highest monthly revenue for the year, generating 1.01 billion ad impressions through its host-endorsed ads and its automated advertising marketplace, Showcase.
Cavendish Research, a stockbroker, has set an ambitious target price for Audioboom’s shares at nearly ten times last Wednesday’s price, suggesting a fair value of 1,300p per share.
Cavendish analyst Michael Hill credited the achievement to the strategic use of the AdRip tool since its launch in July 2021. This tool allows Audioboom to replace old ads with new, dynamically served ads after the initial 90-day sales period.
With a record 127 million downloads in Q3, the platform not only set a monthly record for ad impressions but is also expected to continue breaking records in the upcoming months, according to Hill.
Analysts are optimistic about Audioboom’s potential to further increase ad revenue, predicting that the company could see up to 21% growth in 2024 without even raising ad prices, given its current trajectory to earn US$19 million or more this quarter.
In a recent research note, Hill highlighted the management’s efforts to acquire new podcasts, increase inventory with existing ones, and expand relationships with major advertisers.
He also suggested that any improvements in the broader economic environment could lead to higher revenue projections, which would significantly benefit the company’s adjusted EBITDA and cash flow, especially as the management is keen on minimizing guaranteed minimums and optimizing revenue shares for both new and existing podcasts.
