Revenue guidance upgrade on the cards – Updated 30 October
We expect Netcompany to deliver a Q3 report supporting its growth ambitions, and we expect it to raise its 2018 revenue guidance, which currently looks too conservative to us. On reporting day, we expect the market to focus on possible project wins, the Q3 margin and whether Netcompany was able to add more employees (which is necessary if the company is to meet its growth targets). We continue to derive a fair value range of DKK 245-285 per share from a combination of our DCF model and peer group valuation, while recognising that peers have seen multiple contraction since our last report on 9 October.
Commissioned research: In an IT sweet spot
IT service company Netcompany has established an impressive track record and solid market position in next-generation IT systems that provides it with attractive growth opportunities, in our view. Netcompany is in the midst of a step change including significantly larger exposure to the public sector, where contracts are large, complex and not least multi-year. This brings a considerably higher share of typically recurrent revenue. We estimate average 2017-20 revenue and EBITA growth of ~30%, with it beating its 2018 revenue guidance. Our fair value range is DKK 245-285 per share on a combination of our DCF model and peer group valuations. Marketing material commissioned by Netcompany
Marketing material commissioned by Netcompany
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