Raketech’s Q4-results which were preannounced on February 4 were below our forecast, owing to a soft topline while profitability was solid on the back of lower-than-expected opex. Looking into the start of 2025, the company stated its Affiliation assets are this far performing in line with Q4, albeit with somewhat lower revenue due to seasonality, while Sub-affiliation saw a slow start in January but that activity picked-up in February. Raketech did not provide any guidance for 2025, but states that it will come back with an update of its growth strategy and financial outlook in connection with Q1-results.

Raketech continues to focus on growth improvement where it launched new partnerships within Affiliation in the quarter through while it also remains committed to getting Casumba back to growth. The company saw solid growth in AffiliationCloud while it also as seen steady improvement in Network during the quarter, suggesting that revenue in Sub-affiliation could soon start to see sequential growth.

While there are signs of growth stabilization in the quarter, we have adopted a more cautious growth outlook where we now expect revenue to decline in 2025, although we see potential for YoY growth from H2 2025 and beyond. While the company has reduced costs more than expected, the lowered growth forecast results in EBITDA estimates coming down by 21-26% for 2025-26E. Raketech’s valuation remains low with an EV/EBITDA of 2x 2025E (including the earnout liability), while our new base case of SEK15 (SEK21) implies 6x 2025E EBITDA. The market is likely sceptical over Raketech’s ability to pay the earnout, however, even if we assume zero improvement of EBITDA, we estimate that the company should be able to fully pay the earnouts. As such, a stable or improving EBITDA in the coming quarters will likely be a catalyst for an improved valuation.