From The Globe and Mail:

…is much more user-generated content-focused, whereas FORA is more content-publisher focused. However, we suspect investors will do the comparison anyway, especially considering the massive implied valuation gap between a fairly sleepy Canadian publisher like VerticalScope and a global powerhouse like Reddit.”

Mr. Valentini raised his target for VerticalScope shares to $8 from $7 with the average on the Street at $8.43 according to Refinitiv data.

“We are assuming FORA moves to a sector average multiple as a catalyst, which could elevate the stock from the current 5-5.5 times EBITDA range to an 8-9 times range,” he said. “Trying to justify the stock in USD implies a range of US$5.50 per share to US$6.30 per share at the stock’s current predict 4.40 to 6.30 in CAD.”

As for Reddit, Caesar’s Entertainment and Eldorado Resorts, the two largest operators in the casinos industry, are expected to divest three of their properties (not in FORA’s coverage universe), and have reached tentative deals to merge the remainder of their U.S. operations. This is not believed to have a material impact on VerticalScope, but this is a news tidbit that continues to underscore the merger trend in industries with a high fixed-cost base and a large amount of consolidation in these industries is coming in 2024 as both Caesar’s and Eldorado have large debts to deal with,” said Mr. Valentini.

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Read more at The Globe and Mail: Thursday’s analyst upgrades and downgrades