Pricer’s revenue is expected to grow by 18,6% CAGR between 2017 and 2020. The total market for ESL is expected to have strong growth of 24% CAGR between 2017 and 2023 and as a market leader, with roughly 25-35% market share in key markets, Pricer is positioned to capitalize on this growth. Pricer is expected to grow at a slower pace compared to the global market growth because it’s main markets (Europe and America) are expected to grow slower than the global market2.
Order from Best Buy of 375 MSEK boosts sales and creates potential for future growth in the US. The initial deal with US retailer Best Buy to deliver ESL systems to 260 out of 1290 in the US had a large positive effect on sales in 2018 and can act as a reference customer for future growth in the US. Higher CAPEX/Store for Best Buy might imply future investment into ESL systems in remaining stores3.
Trends towards e-commerce and customer composition poses a risk for Pricer. The rise of e-commerce causes uncertainty about the future net store roll-out. However, research suggest a positive future net store roll-out for Pricer’s key customer group. Because a small number of customers comprise a large share of total revenue, there is some uncertainty regarding future revenue.
A 50/50 split of the peer valuation and the historical valuation implies an upside of 23,1%. The peer valuation indicates a potential upside of 33,8% from a closing price of 9,9SEK. The historical valuation produces an implied share price of 11,1SEK which indicates an upside of 12,4% from a closing price of 9,9SEK. The 50/50 slip valuation given an implied share price of 12,2 with a potential upside of 14,5%.
Analysts: Christopher Carlsson and Natalie Nilsson