Please don't forget to provide KPIs

More price increases, earlier than expected

Fortnox (Buy, TP: SEK83.00) - Q3 reinforced our scalability thesis

Fortnox continues to execute well in a tough market, with adj. EPS of 34% and adj. FCF growth of 104% YOY, demonstrating the business model’s resilience and scalability. The deconsolidation of Offerta should trigger an organic sales growth acceleration in Q4e at higher margins, while encouraging KPIs for the business card and payments offering show incremental potential for 2025e. Since 2021, the stock has been roughly flat, as it has grown into its valuation multiples (~50% multiples contractio...

Approaching improved organic growth

Better margins, but weaker org. growth

25% organic growth in Q3e is not that bad

Feedback from trade fair visit

Fortnox (Buy, TP: SEK82.00) - Improving fundamentals in Q3e

Short interest is all-time-high after the recent FT scepticism and CEO announcing his departure. We would have preferred to see the CEO execute the next five-year plan, and believe this could keep some investors on the sidelines until a successor is found. We expect short-term uncertainty to decline due to 1) Q3 organic growth acceleration to 28% YOY; 2) we are 2% above Bloomberg consensus on seasonally important Q3e EBIT; and 3) we expect a step-change in FCF. We reiterate our BUY with a reduce...

Competitor has raised prices by 100%

CEO stepping down

Visma SPCS increases prices again

Fortnox (Buy, TP: SEK84.00) - Moving to easier comparables

The bright spots from Fortnox’s Q2 results were 30% EPS growth YOY despite macroeconomic headwinds, and despite lending-based revenues up 64% YOY from a higher base, cash conversion improved to a 38% adj. FCF margin. Fortnox is likely to have to beat consensus for the stock to re-rate, but as it is trading close to trough valuation multiples, we see its seasonally strong Q3e as a potential catalyst, with sales and EBIT growth acceleration to 32% and 40% and a reversal of negative calendar swings...

Transaction-based sales growing in importance

Solid Q2e, in line with expectations. Fine-tuned estimate revisions. We maintain BUY on prospect of improved growth in H2e.

Better organic growth, strong FCF

Helps to prioritise other areas

Price hikes aid Q2, positive H2 outlook

Q2e: 25% org. sales growth and EBIT of SEK 201m. Estimates fine-tuned - re-accelerating org. growth in H2e. 43x '24e EV/EBIT — we reiterate BUY, TP of SEK 72 (70)

Fortnox Minor model adjustments

Ahead of Fortnox’s Q2 results (due at 08:30 CET on 12 July), we have trimmed our 2024e EPS by 1% to factor in calibrated growth assumptions and higher opex from recent hiring. We do not consider these changes to be material and we have not changed our BUY recommendation. We have lowered our target price to SEK84 (85). On course for a re-rating in H2. Following recent criticism in the Financial Times, we believe Fortnox will have to beat consensus numbers (we are in line with Bloomberg consensus ...

Insights from the CMD

Thoughts ahead of CMD

Riding on price tailwinds from Q2e

Solid Q1, but with adj. EBIT 3% below due to net recruitments. Fine-tuned sales, but '24e-'26e EBIT down 4-3% on higher opex. Share to benefit from improved organic growth: up to BUY (Hold).