Cash flow outlook even stronger

Storytel (Buy, TP: SEK80.00) - Q3 displays flywheel dynamics

Storytel’s broad-based Q3 beat showcased flywheel dynamics, with solid net adds, record-low churn, a growing share of internal content consumption raising margins, improved customer acquisition efficiency, operating leverage from cost savings, and strong cash flows. We reiterate our BUY and have increased our target price to SEK80 (78), as Storytel’s raised full-year guidance continues to fuel positive consensus revisions, allowing for a combination of a step-change in earnings, FCF momentum, an...

Q3: Impressive profitability and guidance upgrade

Strength ahead

Storytel (Buy, TP: SEK78.00) - Gross margin momentum

We are 7% above Modular Finance consensus Q3e adj. EBITDA on positive content mix and the full impact of recent cost actions. We have now seen the long-awaited shift in the investor base, but acknowledge that investors could still take a wait-and-see approach to Storytel’s new CEO (starts 1 October) and likely strategic review before there is a re-rating. We reiterate our BUY, with a trimmed SEK78 (80) target price; we continue to see a step-change in profitable growth and FCF generation at an u...

Low churn, strong defense

Broad-based strength reinforces BUY

Q2: Strong report with broad-based beat

On track for strong margin expansion

Q2 should not contain any major surprises, while showing that Storytel is on track to reach its targets. BUY: Storytel remains on course and the valuation is too low.

Storytel Minor model adjustments

Ahead of Storytel’s Q2 results (due on 30 July) – which we expect to show the first positive net-profit quarter since 2016 – we have calibrated our 2024–2025e adj. EPS (by 2–0%), reflecting updated FX and a revenue mix shift in Non-Nordics. We do not consider these changes material, and we have not changed our BUY recommendation. We have lowered our target price to SEK80 (81). Q2e adj. EBITDA 8% above consensus. Despite the fierce competitive environment in the lower-price segment in Sweden, we ...

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 operatio...

Higher conviction after strong Q1

Q1 was essentially in line with our expectations and reinforced the attractive earnings outlook. BUY: Storytel remains on track and the valuation is too low.

Q1: encouraging subs development

CEO departure increases uncertainty

Exciting year ahead

Seasonally weak Q1 to show strong improvement. We have become more optimistic about profitability. BUY: Storytel is on a good path and the valuation is too low.

Storytel (Buy, TP: SEK75.00) - The plot thickens

We believe recent insider trading and EQT’s board representative not standing for re-election could signal a potential shift in the shareholder base and direction for Storytel, which could create some short-term uncertainty, but also trigger a strategic review. We reiterate our BUY and SEK75 target price as we see potential upside to Storytel’s 2024 EBITDA margin guidance with a step change in FCF generation driving an undemanding valuation, with a 2025e EV/EBITDA of 7x, P/E of 19x and OpFCF yie...

Storytel (Buy, TP: SEK75.00) - Unveiling the next chapter

The share price is up 130%+ since its October-lows, and we believe we have reached an inflection point. The SEK672m writedown of Audiobooks.com and less focus on its 15 expansion markets marked the end of the turnaround, in our view. In its next chapter, management is building credentials of overperformance and the 2024 guidance looks to be in reach. We believe Storytel offers investors sustainable double-digit organic sales growth, attractive profitability, strong FCF ramp-up and an undemanding...

Storytel (Buy, TP: SEK68.00) - Strong momentum set to continue

Our app data suggests Storytel’s organic growth continues to accelerate after the summer months, and we expect strong Q4 results. We see an impairment risk of ~SEK470m related to acquisitions made in 2020–2022 but believe this is factored into the depressed share price. We reiterate our BUY and SEK68 target price.

Storytel (Buy, TP: SEK68.00) - Turning the page

We believe Storytel is making progress on its strategic shift, which saw a step-change in Q3 – it beat Visible Alpha consensus due to: 1) revenue and subscriber growth; 2) margin expansion across all P&L lines; and 3) cash flow improvements, alleviating concerns about weak consumer demand. Storytel seems to be in better shape than it has been in many years as it has been able to attract more and higher-quality subscribers, at a lower cost, while showing improved churn. We have raised our 2023–20...

Storytel (Buy, TP: SEK65.00) - Step-change Q3 results ahead

Investor sentiment could remain lukewarm short-term given competitive concerns related to Spotify’s accelerated audiobook push, weak consumer trends, a lack of valuation support near-term from profit lines below EBITDA in the P&L, and shareholder overhang risks. That said, we expect strong Q3 results based on robust summer months, according to our app data analysis, and we are 22% above Visible Alpha consensus EBITDA, while its likely first positive OpFCF could reestablish confidence in its prof...