The report is available here: IZEA October 2016 Update.
Highlights from the update note are as follows:
IZEA continues to report strong fundamental growth in its business, as demonstrated by a recent corporate update in which the company disclosed recent trends in bookings and profitability
- IZEA reported bookings growth of 14% YoY in 3Q16, up to $7.7mn from $6.7mn in 3Q15.
- Trailing 12-month bookings have risen by 48% YoY to reach 29.1mn, versus $19.7mn in the year-ago period.
- IZEA achieved positive adjusted EBITDA in one month during the quarter, a first for the company as it transitions towards a heightened focus on profitability.
- IZEA will update guidance when it reports 3Q16 results; its last publicly stated guidance was for revenue of $27mn - $30mn (61% to 71% YoY growth)
Bookings rise in 3Q16; trailing 12 month bookings up 48%
On October 6, 2016, IZEA reported 3Q16 bookings of $7.7mn. This was up 14% from $6.7mn in 3Q15, and represented an annualized bookings rate of $30.8mn. Trailing twelve month bookings rose by a robust 48% YoY to reach $29.1mn, well ahead of trailing twelve month bookings of $19.7mn in the year-ago period. Trailing twelve month bookings also grew sequentially from $28.3mn in 2Q16.
IZEA generates Adj. EBITDA; will update outlook in November
IZEA management indicated that it will update its 2016 guidance when it reports full 3Q16 results in November. Although 4Q is a strong seasonal quarter, it appears the company will require exceptional sales execution in 4Q to meet its last publicly stated bookings goal of $33mn - $35mn. From a revenue standpoint, IZEA should still be able to demonstrate robust 30%+ year-over-year top line growth in 2016E.
Notably, the company stated that it was able to achieve its first EBITDA positive month of operations during 3Q16. IZEA was able to accomplish this not only due to higher revenues but also from improved margins in Sponsored Search and Content, and tighter controls on operating expenses.
Price target remains to $15.00
We continue to see IZEA as a compelling growth company in the online advertising sector. We are maintaining our price target for IZEA at this time, and adjusting our revenue estimate to $27mn, which represents the lower end of the company's last publicly stated guidance. The $15.00 target reflects an EV/revenue multiple of 2.7x our 2016E revenue estimate of $27.0mn, and represents 160.9% potential upside from the recent price of $5.75.
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About IZEA, Inc.
IZEA operates IZEAx, the premier online marketplace that connects brands with influential content creators. IZEA creators range from leading bloggers and social media personalities to A-list celebrities and professional journalists. Creators are compensated for developing and distributing unique content on behalf of brands including long form text, videos, photos and status updates. Brands receive influential consumer content and engaging, shareable stories that drive awareness. For more information about IZEA, visit http://corp.izea.com.
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