Ambea (Buy, TP: SEK130.00) - Acquiring Validia Oy

Ambea’s acquisition of Validia Oy, entering the Finnish social care market, makes good sense to us. A post-integration valuation of c7.5x EV/EBITA and tacit ROIC of c13% suggest a solid deal, and consolidating Validia Oy implies 4–5% increases to our 2025–2027e adj. EPS. We see a strong case, with robust demand, solid FCF and financials giving room for share buybacks/dividends and further possible acquisitions. We reiterate our BUY and have raised our target price to SEK130 (123).

Ambea (Buy, TP: SEK123.00) - In capital-allocation mode

Q4 showed still-solid revenue, earnings and FCF generation, meeting its medium-term >9.5% EBITA margin target (Q4 LTM 9.7%) already 2024. We see a strong case, given: 1) the robust demand outlook combined with an asset-light, cash-generating model; 2) renewed execution on bolt-on acquisitions and dividends/share buybacks; and 3) an attractive valuation at 2025–2027e FCF yields of 9–10%. We reiterate our BUY and have raised our target price to SEK123 (120).

Ambea AB: 7 directors

Seven Directors at Ambea AB sold/sold after exercising options 131,142 shares at between 97.000SEK and 99.500SEK. The significance rating of the trade was 55/100. Is that information sufficient for you to make an investment decision? This report gives details of those trades and adds context and analysis to them such that you can judge whether these trading decisions are ones worth following. Included in the report is a detailed share price chart which plots discretionary trades by all the com...

Ambea (Buy, TP: SEK120.00) - Margin approaching 9.5% already

Q3 showed continued solid revenue, earnings and FCF generation, with Ambea close to reaching its medium-term >9.5% EBITA margin target (Q3 LTM 9.4%). We see a strong case, given: 1) the robust demand outlook combined with an asset-light, cash-generating model; 2) renewed execution on bolt-on acquisitions and dividends/share buybacks; and 3) an attractive valuation at 2024–2026e FCF yields of 9–11%. We reiterate our BUY and have raised our target price to SEK120 (110).

Ambea (Buy, TP: SEK110.00) - Continued strong execution

Q2 showed continued solid revenue, earnings and FCF growth, with the building blocks to reach the medium-term >9.5% EBITA margin target clearly visible. We see a strong case given: 1) the robust demand outlook, combined with an asset-light, cash-generating model; 2) renewed execution on bolt-on acquisitions and dividends/share buybacks; and 3) an attractive valuation at 2024–2026e FCF yields of 9–12%. We reiterate our BUY and have raised our target price to SEK110 (85).

Ambea (Buy, TP: SEK85.00) - Strong capital allocation case

Solid revenue, earnings and FCF growth continued in Q1, with the components to reach its medium-term >9.5% EBITA margin target clearly visible. We see a strong case given: 1) the robust demand outlook combined with an asset-light, cash-generating model; 2) renewed execution on bolt-on acquisitions and dividends/share buybacks; and 3) an attractive valuation at 2024–2026e FCF yields of 10–14%. We reiterate our BUY and have raised our target price to SEK85 (76).

Ambea (Buy, TP: SEK76.00) - Yet another strong showing

Solid revenue, earnings and FCF growth continued, with the components to reach its medium-term >9.5% EBITA margin target becoming more visible. The robust demand outlook combined with Ambea’s asset-light and cash-generating model, with potential acquisition and restarted share buybacks, and an attractive valuation (2024–2026e FCF yield of 12–17%), makes for a strong case, in our view. We reiterate our BUY and have raised our target price to SEK76 (72).

Swedish small caps

Swedish small caps

Ambea (Buy, TP: SEK72.00) - Solid business improvement case

We see a solid business improvement case playing out in Ambea, with 2023–2026e earnings and FCF set to bring its target of a >9.5% EBITA margin within reach, in our view. We like Ambea’s robust demand outlook combined with its asset-light and cash-generating model, with potential acquisition and capital-allocation opportunities, and an attractive valuation (2024–2026e FCF yield of 12–18%). We reiterate our BUY and have raised our target price to SEK72 (57).

Ambea (Buy, TP: SEK57.00) - Building utilisation and capacity

Q3 showed continued solid revenue, earnings and FCF growth, with the components to reach its medium-term >9.5% EBITA margin target becoming more visible. The robust demand outlook combined with Ambea’s asset-light and cash-generating model, with potential acquisition and capital-allocation opportunities, and an attractive valuation (2023–2025e FCF yield of 13–17%) makes for a strong case, in our view. We reiterate our BUY and have raised our target price to SEK57 (50).

Ambea (Buy, TP: SEK50.00) - Continued strong insider support

Ambea’s Q2 report showed continued solid revenue and earnings growth, with the building blocks to reach its medium-term >9.5% EBITA margin target becoming more visible. The robust demand outlook combined with Ambea’s asset-light and cash-generating model, with potential acquisition and capital-allocation opportunities, and an attractive valuation (2023–2025e FCF yield of 13–21%) makes for a strong investment case in our view. We reiterate our BUY and SEK50 target price.

Northern Lights

Ambea (Buy, TP: SEK50.00) - Balancing headwinds well

While still far from firing on all cylinders, Ambea showed good Q1 progress with the building blocks to reach its >9.5% EBITA margin target becoming more visible. The robust demand outlook combined with Ambea’s asset-light and cash-generating model, with potential acquisition and capital-allocation opportunities, still suggests the stock is undervalued (2023–2025e FCF yield of 13–19%). We reiterate our BUY and have raised our target price to SEK50 (48.5).

Ambea (Buy, TP: SEK48.50) - Hit by sector headwinds

We see the continued de-rating of Ambea post-Q4 as a sector-wide issue in general, although its business model is not firing on all cylinders either at the moment. The robust demand outlook combined with the company’s asset-light growth and cash-generating model, with potential acquisition and capital allocation opportunities, still suggest the stock is undervalued in our view (2023–2025e FCF yield of 17–24%). We reiterate our BUY, but have cut our target price to SEK48.50 (52).

Northern Lights

Ambea (Buy, TP: SEK52.00) - Resetting valuation expectations

Even with its solid demand, we see near-term challenges from cost inflation not being fully offset by price changes; thus, we have reduced our 2022–2024e EPS by 6–14%. We still like Ambea’s demand outlook, asset-light growth, cash-generation, and attractive valuation (2022–2024e FCF yield of 12–16%). We reiterate our BUY but have cut our target price to SEK52 (73), resetting the valuation base to a 30% discount to its historical NTM valuation, better reflecting the current equity market trends.

Northern Lights

Ambea (Buy, TP: SEK73.00) - Share buybacks added

Q3 was close to our expectations, with solid sales growth and FCF. The company sent a strong message of FCF remaining robust, adding a 5m share buyback ambition, which largely balanced the slower phasing of new units and progress in Denmark, on our updated forecasts. We still like the demand outlook combined with Ambea’s asset-light growth and cash-generating model, with an attractive valuation (2022–2024e FCF yield of 12–17%). We reiterate our BUY and SEK73 target price.

Northern Lights

Ambea (Buy, TP: SEK73.00) - Rebuilding the new unit pipeline

The Q2 report was mixed, with weak underlying profitability but strong revenue growth. Ambea is finding organic opportunities and rebuilding its new units (beds) pipeline as well as making value-enhancing acquisitions. We still like the supportive demand outlook combined with Ambea’s asset-light growth and cash-generating model, with an attractive valuation (2022–2024e FCF yield of 10–14%). We reiterate our BUY and SEK73 target price.