Keeps delivering on recurring revenue
Inderes’ Q3 came in slightly better than we had input after the September profit warning. Importantly, from an investment case perspective, Inderes continues to show a strong growth trend in recurring revenue, which we view as more critical than project revenue. With EBITA estimates slightly up, we fine tune our fair value range to EUR 22-24 (previously EUR 21-24).
Q3: Slightly better profitability, commissioned research still growing nicely
Inderes reported slightly better-than-expected profitability in Q3 owing to headcount which did not increase as we expected. Hence, our EBITA estimates are slightly up driven by lower headcount. Short-term, the demand for virtual events (outside listed company customers) should be down. However, looking towards 2023, the comparison numbers should be easy and the relative share of revenue outside listed companies should be very low. Another takeaway from the report was that the number of commissioned research agreements increased more than we had expected, and are now up 17% y/y.
Recurring revenue remains key case driver and should back growth for 2023
From a valuation perspective, we think that the commissioned research business provides solid support when the other businesses experience volatility. Thus, we are not overly concerned about the current weaker performance on the project side, although it impacts group level numbers. We also note that the overall profitability is being eroded by the growth investments in Sweden. Our indicative valuation approach for the standalone commissioned research business is EUR 33m or EUR 20 per share, i.e. 87% of our current fair value mid-point.
Fair value range fine-tuned to EUR 22-24
We continue to see Inderes’ shares as relatively fairly valued. Although the current year multiples are elevated, we remind that the growth investments hide the underlying profitability and should yield growth in the future.
Inderes
Inderes yhdistää sijoittajat ja pörssiyhtiöt. Yhtiö tuottaa syväluotaavaa osaketutkimusta ja sijoittajaviestinnän ratkaisuja yli 400 pörssiyhtiölle, jotka haluavat palvella sijoittajia paremmin. Inderes on listattu Nasdaq First North -markkinapaikalle ja se toimii Suomessa, Ruotsissa, Tanskassa ja Norjassa.
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