Storytel (Buy, TP: SEK81.00) - Upside potential to 2024 targets
Q1 saw sustained double-digit organic revenue growth, margin expansion across all P&L lines and healthy cash generation. Storytel exhibited flywheel dynamics, with solid net adds, a growing share of internal content consumption, higher engagement and retention, and improved customer acquisition efficiency. It continues to re-establish its industry-innovator perception with its popular AI VoiceSwitcher. While investors would prefer a clear main shareholder to trigger a re-rating, from an operational standpoint, we have increased our 2024–2025e adj. EBITDA by 9–8% and reiterate our BUY with a raised SEK81 (75) target price, as we see a step change in FCF generation at an undemanding valuation of a 2025e EV/EBITDA of 6x, P/E of 17x and OpFCF yield of 10%.
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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