Gasporox: Keeping its Phot-on the Gas
Research Update
2022-11-14
07:00
Redeye states the Q3 report was strong across the board. The Company continues on its path of profitability with Gross profit-to-asset-ratio continuing to increase with higher revenue and gross margin. We adjust our estimates for Q4'22–Q4'23 and our fair value range.
Rasmus Jacobsson
Contents
Summary of Q3’22
Download article
We are more confident in Gasporox’s long-term potential due to a better-than-expected third-quarter report. Gasporox will be close to EBIT break-even in 2022 based on the Company’s YTD performance and our Q4 estimates. Our earlier estimate was 2024. Adjusted for capitalized research and development, EBIT break-even is expected in 2023.
Gasporox has shown a clear path to profitability with Q4 in 2020 and 2021, and now Q3’22 all showing positive EBIT and signs of high profitability. Its gross profit to asset ratio has risen from 3% in 2016 to 52% TTM in Q3’22. We expect the Company to report full-year EBIT profitability in 2023.
We increased our gross margin forecast for Q4’22–Q4’23 while increasing our sales forecast for Q1–Q3’23. As a result, we adjust our fair value range to SEK13–SEK54 (Base Case: SEK31) from SEK9–SEK39 (Base Case: SEK22), partially offset by a one-percentage-point increase in our risk-free rate.
SEKm | 2020 | 2021 | 2022e | 2023e | 2024e |
Revenues | 12.5 | 15.7 | 27.0 | 39.0 | 52.6 |
Revenue Growth | 21.1% | 26.4% | 71.4% | 44.4% | 35.0% |
EBITDA | -1.1 | -2.7 | 3.7 | 13.1 | 15.2 |
EBIT | -4.4 | -5.4 | -0.15 | 10.1 | 9.8 |
EBIT Margin | -35.0% | -34.2% | -0.5% | 26.0% | 18.7% |
Net Income | -4.4 | -5.4 | -0.50 | 9.4 | 9.0 |
EV/Revenue | 7.6 | 5.6 | 2.3 | 1.4 | 0.9 |
EV/EBIT | -21.6 | -16.3 | -415 | 5.5 | 5.1 |
Gasporox did 88% better than our forecast for net sales, making SEK6.5m for the quarter instead of SEK3.5m. The difference is due to the pandemic having less impact than expected and overall sales being higher than expected. EBIT was positive for the first quarter, outside the traditionally strong fourth quarter, reaching SEK0.2m versus our forecast of -SEK3.6m. The primary difference was the gross margin, which was much higher than expected at 83% versus our forecast of 70%. This alone saved SEK0.8m. Better OPEX than expected resulted in higher EBIT as well.
Disclosures and disclaimers
Contents
Summary of Q3’22
Download article