eResearch | In this short video, Chris Thompson of eResearch talks about DCM closing its Merger with MCC and eResearch’s 18-page Equity Research Report that covers an in-depth analysis of the company and a detailed overview of its $26.1 million financing, $23.1 million facility sale, and Q1/2023 financial results.
You can download our 18-page Equity Research Report by clicking on the following link: eR-DCM-2023_06_14_UR-2022A-Q123-MCC_FINAL2
DCM is a Canadian-based provider of marketing and business communication solutions to companies in North America. Its technology-enabled content and workflow management capabilities solve the complex branding, communications, logistics, and regulatory requirements of leading enterprises, so its customers can accomplish more in less time. Its services include printing, data & content management, labels & asset tracking, location-specific marketing, and multimedia campaign management.
Company Update:
DCM reported five recent events that were positive for the Company’s valuation, according to our model.
- On March 21, DCM reported final full-year financial results for 2022 with Q4/2022 Revenue and Gross Margins that exceeded our estimates.
- On April 25, DCM announced the completion of its acquisition of Moore Canada Corporation (MCC). We believe this transaction enhances DCM’s capabilities and growth potential. MCC has a highly complementary operating model and is expected to add new products, services, and technology capabilities.
- On May 10, DCM reported first quarter 2023 financial results with Q1/2023 Revenue that exceeded our estimate by $3.4 million.
- On May 25, DCM announced the closing of a $26.1 million Equity Raise to help fund the merger and improve the Liquidity and Leverage ratios.
- On June 8, DCM announced that it completed the sale and leaseback of its warehouse facility in Oshawa for $23.1 million. It was an important step to pay down a portion of the loan obtained as part of the MCC
Financial Analysis & Valuation:
- We updated our model with the Company’s recent financials and adjusted our model to incorporate the merger with MCC.
- We estimate an equal-weighted price target of $6.90 based on a DCF valuation ($10.16/share), a Revenue Multiple valuation ($6.24/share), and an EBITDA Multiple valuation ($4.40/share).
We are maintaining a Buy rating and increasing the one-year price target to $6.90 from $4.50.
You can download our 18-page Equity Research Report by clicking on the following link: eR-DCM-2023_06_14_UR-2022A-Q123-MCC_FINAL2
Other DCM Research Reports:
- Update Report (November 11, 2022): Double-Digit Quarterly Revenue Growth Continues Positive Business Momentum and Strong EBITDA in Q3/2023
- Update Report (August 23, 2022): Strong Business Momentum Continues with Y/Y Revenue Growth of Over 23% in Q2/2022
- Update Report (July 29, 2022): DCM Corporate Strategy Drives Business Transformation with Q1/2022 Producing Largest Revenue Growth in 4 Years
- Update Report (April 29, 2022): DCM’s Quarterly (Q4/2021) Revenue Improves Y/Y as a Sign of COVID Impacts Easing
- Update Report (November 24, 2021): DCM Q3 Financials In-line as Consolidation Improves Cash Flow
- Initiation Report (August 16, 2021): Digital-First Strategy and Tactical Consolidation Drives EBITDA Growth at DCM
Notes: All numbers in CAD unless otherwise stated. The author of this report, and employees, consultants, and family of eResearch may own stock positions in companies mentioned in this article and may have been paid by a company mentioned in the article or research report. eResearch offers no representations or warranties that any of the information contained in this article is accurate or complete. Articles on eresearch.com are provided for general informational purposes only and do not constitute financial, investment, tax, legal, or accounting advice nor does it constitute an offer or solicitation to buy or sell any securities referred to. Individual circumstances and current events are critical to sound investment planning; anyone wishing to act on this information should consult with a financial advisor. The article may contain “forward-looking statements” within the meaning of applicable securities legislation. Forward-looking statements are based on the opinions and assumptions of the Company’s management as of the date made. They are inherently susceptible to uncertainty and other factors that could cause actual events/results to differ materially from these forward-looking statements. Additional risks and uncertainties, including those that the Company does not know about now or that it currently deems immaterial, may also adversely affect the Company’s business or any investment therein. Any projections given are principally intended for use as objectives and are not intended, and should not be taken, as assurances that the projected results will be obtained by the Company. The assumptions used may not prove to be accurate and a potential decline in the Company’s financial condition or results of operations may negatively impact the value of its securities. Please read eResearch’s full disclaimer.
