Logo Yazılım (LOGO TI) - Guidance cut may hurt short term: Maintain Buy
Logo’s 2Q19 net income of TRY22m was better than RT consensus forecast of TRY18m and our TRY18m. The operational figures were almost in line with expectations, while higher-than-expected financial income was the reason for the deviation from our bottom-line estimate.
Management lowered its guidance for 2019 due to weak economic conditions in 2Q, signalling continued sluggish market conditions in 2H19. Management now expects TRY402m (cut by 3%) consolidated revenue, TRY131m EBITDA (cut by 3%) and TRY71m profit before tax (cut by 10%) by the end of 2019. Our 2019 top-line and EBITDA estimates of TRY398m and TRY130m, respectively, are very close to new guidance. Therefore, we do not change our year-end forecasts and target price. However, the downward revision in year-end guidance may weigh on the stock in the short term.
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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