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Edison Investment Research Limited
London, UK, 13 September 2022
MotorK (MTRK): Initiation — Gearing up for the automotive digital revolution MotorK is a European software-as-a-service provider of sales and marketing software that helps automotive retailers to bridge the gap between their digital capabilities and the expectations of their customers. It is the only European player to offer a range of products on one platform, SparK, simplifying the implementation of digital strategies for the entire sales process at a low cost for both dealers and manufacturers. We forecast rapid revenue growth and margin expansion as MotorK broadens its product suite, expands geographically and executes its M&A strategy.
Were MotorK’s shares to trade in line with peers on a blend of EV/sales and EV/EBITDA across FY22e and FY23e, the implied share price would be €6.91, suggesting significant upside potential. Performing a reverse 10-year discounted cash flow analysis based on our forecasts to FY24 requires average revenue growth of 14.8% from FY25–31 and an EBITDA margin of 40% for FY26–31 to arrive at this value. Based on nearer-term forecasts and market potential, we believe this appears reasonable.
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1441185 13-Sep-2022
