Original-Research: THE NAGA GROUP AG - from NuWays AG
11.02.2025 / 09:00 CET/CEST
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Classification of NuWays AG to THE NAGA GROUP AG
Company Name: THE NAGA GROUP AG
ISIN: DE000A161NR7
Reason for the research: Update
Recommendation: Buy
from: 11.02.2025
Target price: EUR 1.20
Target price on sight of: 12 months
Last rating change:
Analyst: Frederik Jarchow
Mixed FY24 prelims // Detailed guidance for FY25&26; chg.
NAGA reported preliminary FY24 figures that came in as a mixed back with stronger than expected EBITDA but lower topline. Further, the company provided a detailed guidance for FY25e and FY26e. In detail:
* Sales came in at EUR 62.3m (-20% yoy), below our estimates of EUR 67.5m. The decline is mainly coming from the closure of loss-making non-core subsegments. This is also reflected in lower than anticipated trading activity of only 7.6m closed trades (vs. 11.5m pro forma in FY23; eNuW: 11.0m). Positively, volume per closed trade increased to EUR 14.8k (vs. EUR 7.7k in FY23) and revenue per closed trade to EUR 8.20 (vs eNuW: EUR 4.50). Moreover, total customer deposits, which is a soft indicator for future sales, exceed $ 100m for the first time.
* EBITDA stand at EUR 8.5m (-3.5% yoy vs. eNuW: EUR 5.9m), thanks to higher than anticipated synergy effects from the merger and increasing operational and marketing efficiency: Personnel and other operating expenses declined by 22% and 14% yoy to EUR 10.8m and EUR 13.4m (eNuW), while marketing expenses are down by 11% to EUR 21.0m.
After the transition year 2024 that was mainly characterized by integration, automation and efficiency processes, NAGA looks set to restart its growth engine. First measures such as the cooperation with BVB and Mike Tyson were already taken in Q4Ž24 and should start to translate into additional growth in Q1Ž25. Further measures fuelled by ramping-up are marketing expenses (according to the guidance by >50% yoy in FY25 and another 18% yoy to EUR 39m in FY26) are expected to follow. As a result, management is expecting topline growth of 19% to EUR 74m in FY25 (vs. eNuW old: EUR 87.7m) and another 32% to EUR 97.8m in FY26 (vs. eNuW old: EUR 102.9m). Thanks to further synergy, efficiency and scale effects, EBITDA should to increase to EUR 12.5m in FY25 (vs eNuW old: EUR 12.7m) and EUR 27.6m in FY26 (vs eNuW old: EUR 18.8m) implying margins of 17% and 28%.
As the topline guidance fell short of expectations, we consider it as a rather conservative with room for positive surprises, while the bottom line looks quite ambitious.
Reiterate BUY with a reduced PT of EUR 1.20 (old: EUR 1.40) based on DCF.
You can download the research here: http://www.more-ir.de/d/31727.pdf For additional information visit our website:
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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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2084105 11.02.2025 CET/CEST
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