44x 2023e EV/EBIT on 14% EBIT margin
Good order activity in Q3 bodes well for sales growth ahead
Invisio faced a challenging market in 2020-21 with few client meetings and lower order activity. It also faced difficulties recently in delivering products to customers following component shortages in 2021-22. So far in 2022, we have seen clearly improved order activity, with nine orders and framework agreements announced (vs. seven in 2020 and 2021 combined) for a total announced order value of SEK 350m. In Q3 alone, Invisio announced orders with the UK Ministry of Defence (SEK 16m), a European Nato country (SEK 13+14m), a Northern European police department (framework agreement), the US Department of Defence (SEK 40m) and a new European Nato country (SEK 58m). The majority of these orders are expected to be delivered in Q3 and Q4, supporting our near-term estimates. Together with an improved situation on the component side amid consumer markets turning south, this puts Invisio in a situation where we see both strong current order momentum and a higher likelihood of this following through to deliveries and sales. We estimate a Q3 order intake of SEK 225m, up 36% y-o-y, of which SEK 125m is already announced, and Q3 sales of SEK 186m, up 30% y-o-y.
Margins have likely troughed
Even though we raise our opex estimates somewhat due to increased sale & marketing activities (lowering 2022e EBIT from a low base), we still see significant EBIT improvements y-o-y, meaning that we have likely seen the trough in the R12m EBIT margin, which bottomed out at -2% in Q2’22 and appears set to improve ahead. We leave our gross margin estimates intact just below 60%, as larger contribution from Intercom deliveries (positive) and somewhat higher input costs (negative) offset each other.
Trades at 44x 2023e EV/EBIT on 14% EBIT margin On our revised estimates, the share is currently trading at 44x 2023e EV/EBIT ...
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