Physitrack (Buy, TP: SEK40.00) - FCF break-even needed
Physitrack continues to show solid revenue growth, though incremental margins and cash flow remain below our expectations as a result of the ongoing revenue mix shift and higher investments needed to consolidate recent acquisitions into one holistic wellness platform. We believe we are at a trough for negative margin and cash flow progression, but see a potential share-price catalyst in FCF reaching break-even in H2 2023e. The stock is trading close to the ~SEK15 level at which the co-founders completed a transaction for 4.3% of the outstanding shares in August 2022, which could provide an indicative valuation floor. We reiterate our BUY but have trimmed our target price to SEK40 (41) after lowering our 2023–2024e adj. EBITDA by 5–2%.
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