Raketech: Lowered expectations
Research Update
2024-11-15
08:06
Redeye updates on Raketech following weaker-than-expected Q3-results. Sub-affiliation saw continued soft performance while there was limited improvement for the Casumba assets. The start to Q4 was also soft and the company believes it to be difficult to reach its guidance for 2024E. Given the soft Q3 and continued challenges in both Affiliation and Sub-affiliation, we have lowered growth expectations for 2024-25E while we make limited changes to longer-term forecasts.
Hjalmar Ahlberg
Anton Hoof
Raketech reported weaker than expected Q3-results owing mainly to softer than expected topline in Sub-affiliation. However, gross margin was strong and opex slightly lower than expected which supported solid EBITDA-margin, although absolute EBITDA was c17% below our forecast.
The company has also seen a soft start to Q4 with revenue of EUR4m in October while we expected around EUR5m-6m. The company sees improvement in November, however, it expects it to be difficult to achieve its 2024 EBITDA guidance of EUR17m-19m.
On the back of the soft Q3 and company’s expectations that 2024 guidance will likely not be met, we have lowered our 2024E EBITDA by 11% to EUR16m. We have also lowered 2025E EBITDA by 20% as we expect H1 2025 to remain challenging, with potential for improvement in H2 2025. We expect growth to be back in 2026E, but from a lower base and 2026E EBITDA is down by around 22%. On the back of the lower estimates, we also reduce our valuation range where the new base case is SEK21 (SEK32).
| EURm | 2022 | 2023 | 2024e | 2025e | 2026e |
| Revenues | 52.6 | 77.7 | 62.6 | 65.2 | 70.7 |
| Revenue Growth | 26.6% | 47.6% | -19.4% | 4.0% | 8.5% |
| EBITDA | 20.0 | 23.2 | 16.2 | 17.9 | 19.9 |
| EBIT | 12.4 | 11.3 | 5.2 | 9.9 | 17.9 |
| EBIT Margin | 23.5% | 14.5% | 8.4% | 15.3% | 25.4% |
| Net Income | 8.3 | 6.6 | -9.0 | 7.9 | 16.1 |
| EV/Sales | 1.5 | 0.8 | 0.2 | 0.1 | 0.1 |
| EV/EBITDA | 3.9 | 2.6 | 0.9 | 0.5 | 0.4 |
| EV/EBIT | 6.4 | 5.3 | 2.8 | 0.9 | 0.5 |
Raketech reported revenue of EUR12.9m and EBITDA of EUR3.1m for Q3 2024, which was lower than our forecasts of EUR15.5m and EUR3.8m, respectively. The main deviation on topline was the Sub-affiliation segment, which can be volatile on a quarterly basis and where the company highlighted operational challenges for publishers in its Q2-report. However, gross margin was strong in the segment, coming in at 25% while we expected 22%. Affiliation revenue was slightly lower than expected and the company states that it has not seen any sustainable recovery for the Casumba assets. Looking at the cost development, both employee costs and other costs where lower than expected, despite restructuring costs of around EUR0.1m. This supported an EBITDA-margin of 24% which was in line with our forecast, despite the lower than expected topline. The table below summarizes Q3-results outcome compared to our forecast.
Disclosures and disclaimers