Original-Research: NFON AG - from NuWays AG
13.11.2024 / 09:01 CET/CEST
Dissemination of a Research, transmitted by EQS News - a service of EQS Group AG.
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Classification of NuWays AG to NFON AG
Company Name: NFON AG
ISIN: DE000A0N4N52
Reason for the research: Update
Recommendation: Buy
from: 13.11.2024
Target price: EUR 11.70
Target price on sight of: 12 months
Last rating change:
Analyst: Philipp Sennewald
Q3e: Further improving top-line & profitability, chg.
NFON will release Q3 figures on 21st November. Overall, we expect a solid release including further sequential improvements on top- and bottom-line. In detail:
Q3 sales are seen to increase 5.4% yoy to EUR 21.6m on the back of imposed prices increases as well as continuous seat growth. Again, we expect an increasing share of recurring revenues of 94.6%, implying recurring revenues of EUR 20.4m. On the other hand, non-recurring hardware sales are seen to remain muted in Q3 with EUR 1.2m. With this, we expect the ARPU to come in at a solid level of EUR 9.94. Yet, we expect a further ARPU improvement going forward, driven by (1) the up-selling of premium solutions as well as (2) the consolidation of botario effective with Q4.
On this basis, Q3 adj. EBITDA is expected to come in at EUR 2.9m (+10.3% yoy), implying a 13.3% margin. This should be partly driven by an improved gross margin but mainly by the imposed efficiency measures in personnel (eNuW: cost ratio down 1.9pp vs FY '23) and especially sales & marketing (eNuW: other OpEx -1.7pp vs FY '23). Also, FCF should again come in strong with EUR 1.5m (eNuW). Against this backdrop, management should confirm the FY '24 guidance, targeting recurring revenue growth in the mid- to upper single-digit range (eNuW: +5.3% yoy), adj. EBITDA of EUR 10-12m (eNuW: EUR 11.3m) as well as a recurring revenue ratio of 90+% (eNuW: 94.3%). This should be easily achieved, in our view, given 9M '24e adj. EBITDA of EUR 8.5m as well as sequentially improving recurring revenue growth so far in 2024.
Going forward, we expect the integration of DTS to offer further upside as well as the consolidation of newly acquired AI-subsidiary botario. Here, we also expect strong synergies to arise in the form of cross- and up-selling.
Overall, the company remains excellently positioned to grasp the highly promising opportunities in the European market for integrated business communication, in our view. As valuation remains attractive at 8.4x EV/EBITDA '24e (5.5x '25e), wer reiterate BUY with an unchanged PT of EUR 11.70 based on DCF. NFON also remains one of our top-picks as part of the NuWays Alphalist.
You can download the research here: http://www.more-ir.de/d/31297.pdf For additional information visit our website: www.nuways-ag.com/research
Contact for questions:
NuWays AG - Equity Research
Web: www.nuways-ag.com
Email: research@nuways-ag.com
LinkedIn: https://www.linkedin.com/company/nuwaysag
Adresse: Mittelweg 16-17, 20148 Hamburg, Germany
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