Receives SEK 625m follow-up order from Best Buy…

…with expected roll-out during Q2’20-Q4’20

Shares are trading up 19% today, 13x EV/EBIT on ‘20e

Pricer will now cover ~70% of all Best Buy’s stores
Yesterday, Pricer obtained a SEK 625m follow-up order from US retail-chain Best Buy. This is the largest order the firm has received so far, and the fourth order placed by this customer whose latest two orders (obtained in Q2’18) together amounted to SEK 305m with installation in ~180 stores. The new order comprises installation of Pricer’s solution in 450 stores and means that Pricer will cover about 75% of all Best Buy stores. The roll-out period is expected to occur during Q2’20-Q4’20 and we expect the majority to be installed in Q3’19 in order to have the solution up and running before Thanksgiving (before the important Black Friday and Christmas shopping periods).

‘20e sales and EBIT raised by 40% and 23%
Given that the earlier orders meant that Pricer had rolled out its solutions to ~25% of Best Buy’s stores, and that the customer had publicly stated its satisfaction, we previously highlighted the positive risk/reward for receiving additional orders from this customer. Even so, we had not incorporated this latest order into our forecasts, given the low visibility in terms of timing. Factoring the order into our estimates, we raise our ‘20e sales and EBIT by 40% and 23%, respectively. The reason for the lower EBIT lift is because larger orders generally carry significantly lower gross margins, stemming from volume discounts.

Well-positioned to benefit from the growing ESL market
Even without yesterday’s news, we continue to anticipate higher market activity going forward and think this bodes well for Pricer to capture further growth given its market-leading position. Although we estimate lower gross margin ahead due to increased price pressure, we think Pricer will scale on its growth earnings-wise, reaching 10% EBIT margin in ‘21e. On our revised estimates, Pricer’s shares
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