The strategic change towards affiliate marketing is expected to drive growth and margins
Everysport is steering their business model towards affiliate marketing, which will increase the monetization of the readers. This will bring the growth back, and we estimate that the revenue will grow 8.3% CAGR 2018 – 2022.

The incremental margins on higher monetization are high, and we estimate that the EBITDA margin will expand from 10% 2018 to 16% 2022.

A cleaner balance sheet will reveal a more justified earning power
The market fails to recognize Everysport as a profitable company due to high, temporary, amortizations of intangible assets. However, Everysport will continue to generate strong cash flows in the future.

Between 2018 – 2022 EBT will increase with 24 MSEK, from -5 MSEK to 19 MSEK. The decrease in D&A, mostly due to amortization of goodwill, will account for 45% of the EBT increase and the decline in interest costs will account for 5% of the EBT increase. Everysport will be trading at a low P/E multiples of 7.9 on 2021.

Trading peers and the DCF valuation implies a 100% upside
If Everysport were to be priced as the median affiliate marketing company on EV/2020 EBITDA, it would indicate a share price of 1.27 SEK. That implies an upside of 97%. The DCF suggests an upside of 123%.

Everysport will have a very attractive FCF going forward with a CCR of 5.1 2020 and 1.9 2021. We expect no dividend, and the FCF therefore results in a shrinking Enterprise value. We estimate an Enterprise value of only 32 MSEK in 2021.