Fortnox (Buy, TP: SEK68.00) - 49% organic EBIT margin in Q3
We do not believe any software company is immune to a recession, although we believe Fortnox should show durable organic growth at expanding margins given: 1) the mission-critical nature of its ERP software; 2) its fairly low ARPC at SEK223/month; 3) its innovation and category leadership; 4) its pricing power; and 5) that two thirds of our organic growth forecasts to 2025e stem from scaling up with its existing loyal customer base. Our 2022–2023 forecasts are broadly unchanged, and we reiterate our BUY and SEK68 target price.
DNB Markets is the investment banking arm of DNB Bank ASA and is focused primarily on the Nordic region, as well as internationally on niches such as global shipping, energy and related services, and seafood. DNB Markets offers services in FICC, Equities and Investment Banking advisory from offices in Oslo, Stockholm, London, Singapore and New York. Equity research coverage is offered on c250 Nordic companies. DNB was ranked no.2 in Extel Nordic Research 2017. The DNB Markets’ Credit and FICC Macro & FX Research teams are repeatedly highly rated by Prospera Nordic Institutional Investor Surveys.
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