Solid outlook headed into Q1’21

Backlog supports expectation of FY’21 guidance upgrade

Fair value range updated to SEK 11-54 (8-46)

Growth outlook intact, as company balances COVID impact
With the CEO confirming at ABGSC’s DK small & mid cap seminar (on April 7) that the company is continuing to see a strong growth outlook, while also being able to balance any severe COVID headwinds, we expect Q1’21 to show continued growth momentum. We therefore estimate revenues of SEK 52m, representing ~28% growth y-o-y (FactSet cons. 49m, ~20% growth). We furthermore expect to see the gross margin continue to improve (as the company reaps the benefits of the restructuring implemented in 2019) to 33.8% (cons. 33.5%), up from 24.2% in Q1’20.

Risk-adjusted backlog supports FY’21 guidance upgrade
Due to the recently announced order from UnseenLabs worth SEK 35.5m (expected to be fulfilled in FY’21), we now expect the company’s backlog to be ~SEK 245m (up from SEK 210m) and forecast FY’21 revenues of SEK 250m, up from SEK 232m (cons. 231m), above the current FY’21 guidance of SEK 210-235m. We therefore expect a guidance upgrade, potentially in conjunction with the Q1’21 report or later in the year. Our expectation of a guidance upgrade is based on segment estimates, which are derived from the historical risk-adjusted backlog at the beginning of the year vs. actual registered revenues at the end of the year. This shows that the company has historically been able to deliver revenues significantly above the initial backlog, especially in segments with low fulfilment time (e.g. academics).

Scenario valuation used due to unique industry
We increase our fair value range to SEK 11-54 (8-46) to reflect our improved outlook. We furthermore continue to see GomSpace trade below peer groups and in relative terms at an indicated ~57% below acquired peers within the ‘new space’ segment.

research@abgsc.com (Introduce.se)

ABG Sundal Collier - Introduce.se