In this financial analysis, analyst Lykke Nyberg and Filippa Lövgren take a deep-dive into Lime Technologies. The company provides CRM solutions to small and medium-sized enterprises and is currently market-leading in Sweden, holding a market share of 18.0%. With expected revenue growth of 18.4%, an expected EBITDA margin of 28.5% and a multiple of EV/EBITDA in 2020E, we estimate an upside of 41.6%.

Investment highlights:

  • The software as a service (Saas) CRM market is expected to grow with a CAGR of 21.0% between 2017 and 2023E, giving Lime great opportunities to continue growing.
  • Lime’s market penetration strategy is to focus on the SME market, which is less competitive and allows for a greater opportunity to compete and win market shares. 
  • Thanks to increasing repetitive revenues, Lime can invest more and plan factors of production. This, together with economies of scale, will decrease the marginal cost per customer, and shows the inherent scalability in the business model.

To get the analyst’s full view, please see the report below: