Analysts Samuel Hammarling and Wilhelm Rippe have investigated the outlooks for West International, a company delivering transaction- and payment solutions for retailers.

Though a fairly high price-tag, currently valued at around 60x its earnings, there are potential improvements in margins through cost advantages; that follows increased recurring revenues. In addition, despite a competitive market with large players such as Ingenico and Verifone who controls 80% of the market, the company has still proved a high growth rate. Through a discounted cash flow analysis, the analysts have indicated a potential upside of 17,9 % as a base-scenario.

 

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Case summary: 

  • High gross margin of 58% and EBITDA growth of 133%
  •  Global expansion in the pitfalls provides good opportunities for future sales growth
  •  In the base scenario, West should be valued at 15.1 SEK per share, which implies an upside of 19% from today’s share price

 

WestInt.front