Fortnox: Well-positioned for a recovery - ABG

Q2e sales of SEK 231m and adj. EBIT of SEK 68m
Minor estimate changes
Promising H2 outlook, ’21e-’23e EV/EBIT of 83-39x

After eight consecutive quarters of earnings beats, Fortnox delivered Q1 EBIT 10% below FactSet consensus, with a significant slowdown in earnings growth compared with previous quarters (adj. EBIT +16% y-o-y vs. 59% on average in the preceding 14 quarters). One of the reasons for this was that Fortnox made several changes to its platforms in Q1, including moving customers to a new finance platform and implementing a new subscription system, which we believe stole some internal resource focus in the quarter, and thus hampered growth. In addition, the pandemic continued to hurt the company’s transaction-based sales, which declined -13% q-o-q (vs. -12% q-o-q in Q1’20 and -1% in Q1’19). We expect both trends to continue in Q2, but then to abate in Q3.

We estimate improved growth metrics in Q3e and beyond, driven by: 1) a recovery in transaction-based sales as lockdowns ease, and 2) solid traction for recent product launches. 15 new products and functions were launched by Fortnox in the second quarter of 2021, including its marketplace. Fortnox’s share is currently trading at a f12m EV/EBIT multiple of 69x.

Länk till analysen i sin helhet: https://www.introduce.se/foretag/fortnox/Equity-research/2021/8/fortnox---well-positioned-for-a-recovery/