Jumpgate Q3 2024: First profitable quarter
John Westborg answers the top questions on this Research Update
Research Update
2024-11-22
07:00
Analyst Q&A
Active
Ends in 2 days and 6 hours
John Westborg will answer the top questions on this Research Update
Ends in 2 days and 6 hours
Redeye updates on Jumpgates following the company’s Q3 results, which was in line with our forecasts. We highlight the company’s progression marking the first quarter where the company showed a net profit. We reiterate our fair value range.
John Westborg
Hjalmar Ahlberg
Q3 results in line with forecasts
Sales during the quarter amounted to SEK19.1m, translating to a y/y growth of 6% and an EBITDA of SEK2.9m, corresponding to an EBITDA margin of 15%, and was in line with our forecasts of SEK18.9m in sales and an estimated EBITDA of SEK2.6m. Furthermore, the Q3 report also marks the first quarter in which Jumpgate showed a net profit, which came in at SEK1.4m (SEK-4.2m).
Title reveal of WFH project
During the quarter, Jumpgate announced that one of its work-for-hire projects is a remaster of the classic game series FATE for Gamigo (a subsidiary of Verve Group). The new remaster with the title FATE: Reawakened intends to remaster all four titles within the FATE series and release it on both PC and console. The development contract began in Q1 2024 and has an order value of SEK3.2m.
No changes to our fair value range
Following the report which was in line with our Q3 2024 forecasts we have made limited changes to our Q4 2024e estimates while leaving our 2025e and 2026e estimates intact. We reiterate our fair value range of SEK2 to SEK10.5 with a base case of SEK6.5 which implies a EV/EBITDA of 4.5x while the share is currently trading at a EV/EBITDA of 3x 2025e.
Key financials
| SEKm | 2023 | 2024e | 2025e | 2026e |
| Net Sales | 52.1 | 74.2 | 103.8 | 122.8 |
| Sales Growth | 87.7% | 42.4% | 39.9% | 18.3% |
| EBITDA | -12.0 | 2.5 | 15.8 | 19.8 |
| EBIT | -29.9 | -0.83 | 11.7 | 14.9 |
| EBIT Margin | -57.4% | -1.1% | 11.2% | 12.1% |
| Net Income | -35.2 | -9.9 | 8.7 | 11.4 |
| EV/Sales | 133 | 0.7 | 0.4 | 0.4 |
| EV/EBIT | -232 | -61.4 | 3.4 | 3.0 |
| EV/EBITDA | -577 | 20.8 | 2.5 | 2.3 |
Q3 in line with estimates
Sales for the quarter reached SEK19.1m (SEK18.0m), which is in line with our forecast of SEK18.9m. Year-over-year sales growth was 6%, and Jumpgate delivered an EBITDA of SEK2.9m (SEK-0.1m), which is in line with our estimate of SEK2.6m. The significant EBITDA improvement compared to last year reflects the company’s successful focus on cost control, which has delivered a positive EBITDA for two consecutive quarters. Operating cash flow for the period was SEK1.4m, with an end-of-period cash reserve of SEK9.3m, which we believe to be sufficient to support the company’s current operations.
Disclosures and disclaimers