StrongPoint: Tough market and higher costs to weigh on Q4 - ABG

Q4e revenue ~NOK 306m
Sainsbury's contract a positive development, but more orders needed
Estimates down, '24e adj. P/E ~8.2x


Q4e: Orders postponed and higher costs weigh

We expect StrongPoint to report Q4 revenues of ~NOK 306m, marking a 24% decline from Q4'22. Customers keep holding back investments, and large orders anticipated for Q4e have been pushed to Q1'24e (potentially even Q2'24e). The gross margin for the quarter is likely to hover around 40-41%, a decline from the 44.2% in Q3'23. We forecast Q4 EBITDA of ~NOK -7.5m, a significant drop from NOK 33.6m in Q3'22. StrongPoint is experiencing headwinds related to personnel expenses and restructuring costs, which are likely to weigh on the Q4e figures. We anticipate Q4 EBIT and net profit of ~NOK -18.3m and NOK -13m, respectively.

Länk till analysen i sin helhet: https://cr.abgsc.com/foretag/StrongPoint/Equity-research/2024/2/strongpoint---tough-market-and-higher-costs-to-weigh-on-q4/