Entravision ad-tech growth and hidden asset value
Smadex ad-tech still cheap after a sharp re-rating; spectrum and legacy media add free optionality
The investment case rests on three pillars: Smadex-led ad-tech with accelerating revenue and margin expansion, owned broadcast spectrum worth hundreds of millions, and a fading but still cash-generating Hispanic TV and radio footprint. Legacy media bleeds except in political-ad years; ad-tech drove 1Q2026 revenue up 204% year-over-year and profit up 427%, with operating leverage emerging. At roughly $1.22 billion enterprise value, annualized ad-tech EBITDA near $137 million implies about 9x EV/EBITDA for hypergrowth. A conservative forward model (20% quarterly ad-tech revenue growth, margins rising ~2 points per quarter) could reach about $824 million revenue and $209 million profit in 2026; a 30x EV/EBITDA on that profit implies enterprise value near $6.3 billion, roughly five times current levels, before spectrum and media. Customer concentration at Smadex is a key risk; a Smadex spin-off could unlock value similar to mobile ad platform peers.
| Instrument | Side | Target | Reason |
|---|---|---|---|
| EVC | Long | Ad-tech is scaling with accelerating growth and margin expansion while the stock still trades near single-digit EV/EBITDA on annualized recent ad-tech earnings. Upside from a reasonable growth-and-multiple scenario is on the order of several times enterprise value, with additional upside from spectrum and optional value from spinning off Smadex. Customer concentration is a real risk, but the asymmetry favors staying invested through further proof points, including the next earnings report. |
Smadex ad-tech growth and margin expansion justify a much higher multiple than ~9x annualized EBITDA
A former Hispanic broadcast operator now earns most of its economic value from Smadex, an in-app and CTV ad platform bought for $3M in 2018. Ad-tech revenue is accelerating with strong operating leverage; annualizing the latest quarter implies modest EV/EBITDA versus triple-digit YoY growth. A conservative forward model (ongoing quarterly revenue growth with rising margins) can support materially higher enterprise value, with owned spectrum and a declining but cash-generative media arm as additional assets. Customer concentration in Smadex is a key risk.
| Instrument | Side | Target | Reason |
|---|---|---|---|
| EVC | Long | Ad-tech EBITDA is scaling fast off a sub-10x EV/EBITDA base on annualized run-rate, while margins are still ramping. If growth moderates to still-strong quarterly gains and the market applies a growth-ad-tech multiple, enterprise value can plausibly reach several times today’s level before counting spectrum and legacy media. Risk/reward favors staying invested through the growth phase rather than exiting into early re-rating. |
Themes
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