Shareholders in outdoor advertising business oOh!Media Ltd (ASX: OML) endured a difficult start to the week on Monday.
Shares in the ASX All Ords media stock tumbled by 10% during the session, sliding from Friday's close of $1.77 per share to finish at $1.59 apiece by the end of trading.
The sell-off stemmed from the group's first-half FY25 results which appeared to fall short of expectations.
However, there could be a silver lining.
Renowned investment bank Macquarie Group Ltd (ASX: MQG) has now chipped in with its views on oOh!Media's results – and the analysis offers encouragement for investors.
But before we get to Macquarie's verdict, let's first step through oOh!Media's performance over the first half of the financial year.
What happened?
oOh!Media specialises in out-of-home (OOH) advertising – a sector covering billboards, bus shelters, digital screens, and other high-visibility formats in busy public spaces.
All up, the group manages a network of more than 35,000 sites across Australia and New Zealand, spanning roadsides, shopping centres, airports, and others.
For the first half of FY25, the ASX All Ords media stock delivered a solid set of numbers.
Revenue of $336.2 million jumped by 17% year over year.
Adjusted gross profit climbed by 13% to $140.6 million, and underlying operating earnings (EBITDA) increased by 27% to $62.2 million.
Most impressively, adjusted underlying net profit after tax (NPAT) of $26.5 million bolted by 46% from the same time last year.
Shareholders were also rewarded with a fully franked interim dividend of 2.25 cents per share, marking a 29% increase from the previous corresponding period.
So, with the numbers on the table, how does Macquarie view the ASX All Ords media stock?
Let's find out.
Macquarie has its say
Firstly, oOh!Media's half-year revenue growth of 17% came in 4% ahead of Macquarie's forecasts – and above management's prior guidance.
The broker also highlighted the company's new contract win with Transurban, which is expected to contribute some $22 million in annual revenue.
Macquarie is now forecasting revenue for the full financial year to come in at $154 million. This represents 20% year-over-year growth but is 3% lower than its past prognosis.
However, it noted that NPAT for the half year came in slightly below expectations, despite the sharp year-over-year jump.
It now projects NPATA for FY25 to come in at $71 million – a 5% downtick from earlier estimates.
That said, the broker upgraded is forecasts beyond FY25 after incorporating oOh!Media's new contract wins worth $90 million between FY24 and FY27.
It believes the ASX All Ord media stock is now positioned to deliver average annual revenue growth of about 9% through to FY27, which could support further growth in NPAT.
In turn, Macquarie placed an outperform rating on oOh!Media shares with a 12-month price target of $2.00 per share.
This implies potential gains of 19% from $1.68 per share at the time of writing.
