Dividend signals confidence, but strategic update matters more

Storytel (Hold, TP: SEK96.00) - A story on hold

The Q4 results were strong across the board, and a solid gross margin again largely explained the recent profit step change; however, we believe there are few low-hanging fruit left. While we forecast 33% YOY growth in EPS in 2025 and the valuation remains undemanding, we see little likelihood of meaningful consensus revisions providing a catalyst other than multiples expansion, implying a modest risk/return. Storytel plans to unveil new medium-term targets in Q2; we believe they could be conser...

Confidence grows after a strong Q4

Strong Q4 across the board with impressive profitability

Executing on content strategy with new acquisition

Storytel (Buy, TP: SEK81.00) - To end 2024e with a strong chapter

We expect Storytel to close 2024 with a strong chapter, partly aided by one-offs. Its improved gross margin remains the key driver behind the recent step change in EPS and FCF, although we acknowledge most of the lowest-hanging fruit to improve this is likely in the past. We could see investors take a wait-and-see approach until the new CEO presents her strategy in H1e, while appreciating 20% EPS growth YOY in 2025e at an undemanding valuation. We reiterate our BUY and have raised our target pri...

Takeaways from CEO dinner

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