The adjusted EBITDA of SEK 3.4m (excluding a divestment gain of SEK 1.4m) beat our expectation of SEK 1.2m, and the margin turnaround story continues with profit improvement remaining in a positive trend. In addition, Tempest presented a new revenue target of SEK 1,000m by 2025 (previously SEK 500m by 2022), implying sales CAGR of more than 20% per annum. The long-term EBITDA margin target of 10% is unchanged. Therefore, despite the challenging environment and a slight slowdown in growth in 2020, we consider the long-term investment case to be intact and expect growth to accelerate again in 2021.
New mid-point DCF value of SEK 54 per share
Following the report, we have increased our short-term earnings forecast and derive a new DCF-based fair price range of SEK 45-62 per share with a mid-point value of SEK 54 (WACC of 7.5%, steady state EBIT margin of 4.0%).
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