Litium: Q4e: Consumer headwinds are blowing - ABG

Cut Q4'22e sales by 15%
Swedish consumer confidence at 25-year low
Long-term prospects intact


Q4'22 estimates

Swedish consumer confidence hit an all-time low in October 2022 and has since remained at all-time-low levels. Considering that Swedish consumers are very pessimistic, we believe that B2C-related volumes are likely to come down for Litium, and therefore variable sales should also come down. Therefore, we reduce our Q4'22 ARR and sales estimate by 7% and 15% respectively. It is difficult to assess any ongoing cloud migrations and the commensurate impact, but if the last quarter is a fair indicator, that figure should be around SEK 2m. Finally, Litium's cost base has some flexibility to it that can be utilised to decrease the cash burn of the business.

Länk till analysen i sin helhet: https://cr.abgsc.com/foretag/Litium/Equity-research/2023/2/litium---q4e-consumer-headwinds-are-blowing/