Redeye thinks the underlying reality of Nepa is improving - with strong sequential ARR growth and firm actions towards improved profitability. Redeye estimates Nepa to be trading at 5.5x and 4.3x cash flow for 2024e and 2025e, respectively. As a measure of cautiousness, Redeye reduces its estimated terminal EBIT margin for all cases and raises its required rate of return - resulting in a slightly lowered fair value range.
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