Microsoft Q1 points to ~16% GP growth in Q1

Crayon (Sell, TP: NOK75.00) - All eyes on Q4

While Q3 adj. EBITDA was in line with our estimate (8% below company-compiled consensus), cash flow was well below (partly due to a couple of exceptionals; guided to normalise in Q4), leaving us still cautious on the stock and awaiting more proof-points on improving working capital and cash flow. Having made only limited changes to our 2024-2025e headline estimates, we reiterate our SELL and NOK75 target price.

Microsoft Copilot to have general availability from November

Now that Microsoft has finally announced the general availability of Copilot for enterprises from November this year, we look at what it could entail for the first-line value-added resellers in our coverage universe, Atea and Crayon. In sum, if we assume Copilot achieves penetration of 5–15%, we estimate a gross profit tailwind of ~2–3% for Crayon and ~1% for Atea at a group level for 2024–2025.

Crayon (Sell, TP: NOK75.00) - Waiting for the dust to settle

After tailwinds from favourable channel dynamics during the past 12 months, we are taking a cautious approach to Crayon, awaiting further clarity on the situation in APAC & MEA. With the company facing tougher comparable numbers YOY over the next 6–12 months, we reiterate our SELL and have lowered our target price to NOK75 (100).

Northern Lights

Crayon (Sell, TP: NOK100.00) - Downgrade on risk/reward

As the stock has risen significantly on recent ‘take-private/take-out’ speculation in the media, Crayon’s indications of a collection in the Philippines, and AI tailwinds, we find the valuation sufficiently reflects several potential catalysts that have yet to materialise. As such, we find the risk/reward skewed to the downside. We have downgraded to SELL (HOLD) and lowered our target price to NOK100 (110). While the current valuation is not too lofty in our view, we consider it rich enough for ...

Northern Lights

Crayon (Hold, TP: NOK110.00) - Mixed Q1 leaves uncertainty

After a mixed Q1, which left us unsure which headwinds and tailwinds were temporary or persistent, we have made only limited revisions to our estimates, and reiterate our HOLD and NOK110 target price. In our view, key questions remain unanswered about working capital, pull-forward of demand, and the underlying performance in the acquired rhipe business unit and markets outside the Nordics.

Crayon (Hold, TP: NOK110.00) - Working capital headwinds likely a lid ...

While Crayon continued to demonstrate standout growth in gross profit in Q4, working capital headwinds and increasing debt servicing costs left us less upbeat on the quarter. As a result, while our adj. EBITDA estimates are unchanged, we have lowered our 2023–2024e adj. EPS by ~11–12%. Furthermore, with the market’s heightened focus on the bottom line and cash flow, we believe Crayon has to prove itself on both before achieving the premium multiple its growth trajectory might otherwise allow. We...

Crayon Group Holding - Attractive valuation at cautious estimates

FY growth target intact, margin target looks challenging We expect 2023 gross profit growth of 10% Valuation still highly attractive: ~10.4x ’23 cash EBIT

Crayon (Buy, TP: NOK160.00) - Mixed report, but good overall

While Q3 had a lot of moving parts, we find the continued market share gains and 28% YOY organic growth (constant currency) illustrative of Crayon’s leading market position. However, these gains come with greater than expected upfront investments, and we have cut our 2022–2024e adj. OPFCF by 2–6%. We reiterate our BUY but have cut our target price to NOK160 (200) on updated estimates and unfavourable peer trading.

Crayon Group Holding - Impressive growth, but adj. EBITDA in-line

Adj. EBITDA largely in line with cons Growth and profitability target maintained, lifts ’22 capex Expect a fairly neutral to slightly positive reaction

Crayon Group Holding - Resilient business model at an attractive price

Q3e: 36% GP growth and 13.9% margin Expect ’22 growth and margins in low end of guidance Valuation still highly attractive: ~12x ’22 adj. cash EBIT

Crayon Group Holding - Still on track to hit short- and long-term targ...

Large part of Q2 miss explained by seasonality 2022 still set to be solid, long-term case is intact Reiterate BUY with target price of NOK 228 (263)

Crayon (Buy, TP: NOK200.00) - Can’t always be perfect

While Crayon significantly missed our estimates in Q2 due to higher growth investments, and we have cut our 2022–2024e adj. EPS by 10–6% on higher interest cost assumptions, we found the underlying trends in Q2 supportive of our investment case. We therefore reiterate our BUY, albeit with a lowered NOK200 (210) target price due to our estimate revisions.

Crayon Group Holding - Adj. EBITDA miss driven by lower margins

Q2-22: GP -1% vs cons, adj. EBITDA -10% vs cons Some of the margin miss likely explained by seasonality Expect a negative share price reaction today