BofA starts Fortnox with 'buy' on 'supernormal' yet underestimated growth path

Fortnox AB

01/03/2024 12:39

** BofA Research initiates Fortnox  FNOX.ST  with "buy" and
PT of SEK 88, citing its high-quality business with
"supernormal" yet underestimated growth trajectory
    ** It points out the company is by far the largest player in
the Swedish SME accounting software market, with about 536,000
customers and a track record of innovation
    ** Historically, growth was driven by user net add growth,
but going forward BofA expects monthly average revenue per
customer (ARPC) growth to provide >50% of future growth
    ** The future growth opportunity is dependent on customer
growth, pricing, and cross-sell opportunity, it says 
    ** BofA expects Fortnox to hit its 700,000 customers target
a year later than planned but says the company should reach its
SEK 300/month ARPC ambition about a year ahead of plan
    ** Revenue growth should moderate from 23% in 2024 to a
"still very healthy" 14% in 2028, BofA says, whilst reported
EBIT margins should rise from 44% to 52% 
    ** Out of eight analysts covering Fortnox, three it "strong
buy"/"buy"​, two "hold" and three "sell"/"strong sell
    ** The stock rises 5.6% at 1238 GMT

 (Reporting by Marta Frąckowiak)
 ((marta.frackowiak@thomsonreuters.com))