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Westpay: Setting up for the future - Redeye

Redeye keeps the fair value of Westpay based on the company to be profitable earlier than expected with a lower cost basis after a period of good cost control. The fourth-quarter report showed that the important KPIs are going in the right direction. Unfortunately, we fear that COVID-19 will impact the net sales negatively in the first quarter, but net sales will start to recover from there. We keep the fair value on the back of this and continue to see a substantial upside in the Westpay share.

The fourth quarter was a step forward in the important KPIs, recurring revenue, and gross
margin is increasing with our expectations. As the new restrictions due to the pandemic are
hitting the already pressured sectors that Westpay serves, do we lower our revenue
estimates in the short run, but pull forward when Westpay is profitable on an EBITDA level.
We kept our base-case fair value of Westpay at 3.5 per share, corresponding to an upside
of 53%.
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