Logo Yazılım (LOGO TI) - Coding the future: Initiating at Buy
Established in 1984, Logo is one of the largest software companies in Turkey. The company is the leading provider of Enterprise Application Software (EAS) for micro-sized to large-sized companies. Expansion of its client portfolio and acquisitions drove revenue/EBITDA/net profit CAGRs of 35%/30%/29% over 2013-18.
Despite headwinds in Turkey, we expect international operations to drive top-line growth thanks to Logo’s market share improvement in the Romanian ERP market and depreciation of TRY against EUR. Accordingly, we foresee 36% y-y growth in 2019 international revenues, almost fully driven by TotalSoft. Consequently, we forecast Logo’s consolidated revenue/EBITDA/net profit CAGRs of 22%/24%/21% over 2019-21.
We initiate coverage on Logo with a BUY and a TP of TRY52.75, which offers an attractive 38% upside potential. We believe that the company is one of the most promising software companies in Turkey given its strong market position, sound balance sheet and significant growth potential.
Logo Yazilim Sanayi ve Ticaret AS is a Turkey-based company engaged in the development of computer operation systems, business application software, database structures, multimedia software, as well as in the provision of technical support and service, and training. The Company's products are offered in eight units: Small and Medium Enterprises (SME) products, Enterprise Resource Planning (ERP) products, Java products, Vertical solutions, Integration products, Human Resources (HR) products, Business Intelligence solutions, Mobile solutions and LOGO keys. Its products and services are used in a range of industries, such as distribution, machine and automotive spare parts, marine, packaging, retailing, cement, glass, steel, furniture, telecommunication, information technology (IT), tourism and textile. The Company has business partners in Azerbaijan, Egypt, Georgia, Germany, India, Iran, Iraq, Kazakhstan, Kyrgyzstan, Kosovo, Kuwait, Libya, Russia, Sudan, Syria, Turkmenistan, and the Unit
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