Initiation of Coverage: Digital connectivity drives growth; initiate with Buy rating

研报英文原文证据摘录

Initiation of Coverage: Digital connectivity drives growth; initiate with Buy rating

de driver. Downside risk could From To % ch Cons.

come from high concentration of cable customers. Q1 - - - -

Q2E - 0.09 - -

Data center upside: Our data center interconnect (DCI) model suggests a ~$16- Q3E - 0.23 - -

$17b market opportunity over '26-29; we model $100m/$200m of data center Q4E - 0.15 - -

revenue in '26/27; every 1% market share could be ~$25m/$30m incremental rev 12/26E - 0.47 - -

in '26-27. We have not assumed much margin improvement, however data center 12/27E - 0.86 - -

mix and execution could potentially drive some margin upside. 12/28E - 1.04 - -

Steven Fisher, CFA

Our model is organic, but ITG has done $225m of acquisitions since 2024, and Analyst

expects to do more M&A. We estimate ITG has the balance sheet capacity to steven.fisher@ubs.com

spend >$85m on M&A over the next 12 months without exceeding 2.5x leverage. +1-212-713 8634

This could add 10-15% to forward EBITDA.

Avinatan Jaroslawicz

On the downside, ITG's mix is very cable heavy, with 60% of revenues coming Analyst

from Charter/Comcast. CHTR expects spending to ramp down by >30% in 2026- avinatan.jaroslawicz@ubs.com

+1-212-713 1405

28. We calc that ITG would need ~$100m of additional revenues over 2026-28 to

replace the lost revenues from CHTR/CMCSA, assuming 30%/5% declines in their Judah Aronovitz

respective spending. OpEx exposure/wallet share/diversification/M&A could offset. Associate Analyst

judah.aronovitz@ubs.com

Valuation: Our price target is $18 per share +1-212-713-4881

Our $18 target reflects a 9.5x EV/EBITDA multiple on our 2028 EBITDA estimate. The

9.5x is a slight discount to the peer average (DY, CTRI, PRIM).

Highlights (US$m) 12/23 12/24 12/25 12/26E 12/27E 12/28E 12/29E 12/30E