Kempower’s result largely met expectations. Analysts start to see valuation coefficients in the stock, mirroring the place of purchase.
Manufacturer of charging points for electric cars Kempower reported an expected weak first quarter result. Turnover decreased by 24 percent from the comparison period and the company made an operating loss of a good 10 million euros.
Analysts are beginning to see Kempower’s share as attractive, reflecting the valuation coefficients. The average target price is 29.71 euros and the recommendations are clearly on the buy side. On Friday, the course ended at 18.20 euros.
The valuation coefficients are starting to look decent
Insider analyst Pauli Lohi states in his recent company report that Kempower’s valuation is starting to look decent even with realized earnings ratios. At the current exchange rate, reflected in the result of 2023, the ev/ebit figure would be only 22.
“It must be remembered that the company’s result suffered from strong expansion measures, including, among other things, the establishment of North American operations and the doubling of the entire staff during the year,” writes Lohi.
If it is assumed that 20 percent of fixed costs are related to expansion, the ev/ebit figure for 2023 would only be 14, Lohi points out.
Inderes predicts a heavy decrease in the result of the expansion activities during 2024, which raises the ev/ebit number forecast for the current year to 39. For 2025, the number is predicted to be 18 and for 2026 only 11. These levels can be considered quite favorable again.
“Kempower is among the most competitive in an industry with a very strong growth outlook, which is why, in our opinion, the stock can be valued with high valuation coefficients and the valuation should be based on future profit growth.”
Inderes predicts a p/e ratio of 50 for the current year. Next year, the corresponding figure would be 25, and in 2026 it would be 16.4.
Inderes has set Kempower’s target price at EUR 28.00 and has given the company a buy recommendation.
New profit warning already priced?
Kempower issued a profit warning in March, but it may not be the only one this year.
Kempower shares down after results – Analyst: The next profit warning may be coming
Inderes considers a new decrease in guidance likely and feels that it has already been partially priced into the current rate. The reason for the decrease in guidance would probably be the sluggish market demand for chargers, which is believed to pick up in the medium term as the number and share of electric cars in the fleet increases.
Kempower is currently guiding the turnover for the current year to be 360–410 million euros and the operating profit margin to be 5–10 percent. Inderes predicts a turnover of 343 million euros for the year.
Kempower has said that it will move from the First North list to the main list of the Helsinki Stock Exchange during the second quarter at the earliest.