eWork: Remote work growing in importance - ABG

Ability to work remotely is important for IT specialists
Ework is benefitting from this trend
12x ‘22e EV/EBIT is 18% below IT services peers

Only 3% want to work full-time at the office again
The recruitment company Ada Digital recently published the results of its study on what Swedish IT specialists (n=400) deem to be the most factors when selecting an employer. Interestingly, 53% believe that the opportunity to work remotely compensates for a lower salary. Only 3% of the respondents said that they would like to work full-time from the office again, while 11% would prefer to only work remotely; 51% said that they would prefer to mainly work remotely.

IT services markets is strong, but some clouds ahead
The data align well with our thesis that the pandemic has driven increased demand for remote work. This trend benefits Ework, as a significant share of its consultants are freelancers that want full control of their work situation (i.e. the gig economy). Here, we note that the share of assignments permitting remote work is currently well above 2020 levels, according to data from Brainville. Furthermore, Ework is currently benefitting from a strong IT services market. Although we see signs that the situation in Ukraine is putting a slight dent in Sweden’s IT spending due to raised uncertainty, we expect the IT services market to remain strong in the near-term.

We expect 18% sales growth in ‘22e (vs. 8% in 2021)
We expect Ework to report 18% sales growth in 2022e (vs. 8% in ‘21), together with 27% adj. EBIT growth (23% in ’21). On our current estimates, the share is trading at around 12x ‘22e EV/EBIT, which is 18% below its Nordic IT services peers.
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Länk till analysen i sin helhet: https://cr.abgsc.com/foretag/ework/Equity-research/2022/5/ework---remote-work-growing-in-importance/