Gofore is starting to grow to a size where it deserves its own thread. Despite recent challenges, it is probably one of the highest quality companies in its sector. Employer Brand of the Year 2020!
Here’s a ROAST
from January of Gofore’s new CEO Mikael.
Back then, no one was talking about corona or leaving Britain, but the video should otherwise stand the test of time pretty well.
Gofore has grown well even during corona.
Yeah, it’s probably Gofore 
Traditionally, May has been one of Gofore’s strongest months in H1, followed by a slight decline in June and especially July. It’s interesting that Joni believes the revenue decline will continue until September (Edit: in May) and that personnel growth will be zero for the rest of the year. My own view is slightly more positive about the near future, especially regarding the growth in personnel, while there is more uncertainty associated with the autumn.
Would @Joni_Gronqvist have a comment on this 
Hi,
Our revenue forecast shows a slight decrease in May (not until September) due to fewer working days (2 days or 10%) and a strong average price/billing rate in the comparison period.
However, the average price/billing rate decreases in our forecasts for the May-August comparison periods, mainly due to price pressure. In addition, our forecast includes the recruitment of 3 people in May, and after that, we have predicted the number of employees to be stable until the end of the year. Below are the numbers after the April figures and a link to the comment.
Hopefully, this clarified our expectations!
Oops, I mixed up the months in the previous message. I blame the Finnish language where all months have the same ending -kuu 
Thanks for the answer, Joni!
The number of recruitment advertisements and new creations would suggest that the number of personnel is still wanted to be increased even in the current economic situation, and because of this, I am bullish compared to forecasts and the company’s ability to maintain a higher billing rate. For example,
A recruitment advertisement published on 8.5 begins as follows:
Gofore was founded in Tampere in 2001, we listed on the stock exchange in 2017, and we arrived in Turku in autumn 2018. We quickly grew on the banks of the Aura River, partly through our networks, to about twenty people, and now we are aiming for thirty! We would like to recruit you to be part of our team of experienced software professionals.
I believe that unless there is a bigger dip in the autumn, recruitment will continue throughout the year. Of course, the success of recruitment is not guaranteed, even if the search is ongoing.
At Gofores, I’ve come to appreciate the understanding of creating shareholder value through share repurchases when the stock is clearly undervalued.
Acquisition of own shares:
The maximum number of shares to be acquired is 210,000 (or EUR 1.3 million), which corresponds to approximately 1.5% of the company’s shares. The acquisition of own shares will commence at the earliest on March 25, 2020, and end at the latest on June 30, 2020. The acquisition of own shares will be financed with the company’s distributable unrestricted equity.
Currently, the company holds slightly over 20,000 shares, and acquisitions continue on weekdays at a pace of just over 1,000 shares, meaning, somewhat simplified, by the end of the buyback program, the company will have purchased approximately 50,000 shares, or about 0.35% of the company’s share capital. When the daily trading volume of the share is around 2,000 units, the company’s purchases constitute a quite significant portion of the day’s trading. Fortunately, the purchases are at a favorable average price, and the company is not buying shares at any cost. It is quite peculiar, however, that the share price has remained stagnant at its current level despite Inderes’ recommendation and continuous purchases.
Yes, I see that, but Gofore has been stagnant for a long time.
When one wants outperformance, one must find mispriced assets. In a certain sense, finding “strangely priced” companies is part of the game. Otherwise, there would be no point in stock picking.
And then, even if a company is undervalued at the time of purchase in some sense, it still has no obligation to correct its valuation within any specified timeframe.
Gofore’s employee count over 600 and new contract:
Among the new contracts, it is worth mentioning that the Finnish Environment Institute (SYKE) selected Gofore as the implementer of its IT expert services. The contract is valid from June 1, 2020, to December 31, 2023. Through it, SYKE will gain additional resources for the planning, implementation, and maintenance of its environmental information systems and digital services. At the end of the contract period, SYKE may extend the contract for an option period of a maximum of one year. The estimated scope of the acquisition is 500-1,000 person-days per year.
May’s revenue was a slight disappointment for me, even though there were fewer working days than in the comparison period and the coronavirus understandably disrupted operations. However, the recruitment pace continued to be as strong as expected, and there are still many open positions, so it seems to me that market demand will continue to be good for the rest of the year and revenue growth will accelerate during the latter half of the year.
Just a quick excerpt from that business review:
“Our revenue in May was 6.0 million euros. This was lower than May last year, as there were three fewer working days than in May a year ago.
Will the target price be updated? @Joni_Gronqvist
Well, May looked good. “Working day adjusted” turnover grew by about 10%.
Didn’t the revenue “working day adjusted” grow by over 15%? Pretty good anyway 
Oh, of course I compared the numbers to the wrong year myself 
If you expect less and get less, then you are satisfied, but if you expect more and get less, then of course you are dissatisfied. Let’s look at the procurement volumes of the state and municipalities in 2019 vs 2020. Here are three images, the first of which depicts procurements made from Gofore Oyj to municipalities in 2019, the second depicts procurements to the state in 2019, and the third depicts state procurements made so far in 2020. Municipalities have not made any procurements at all in 2020 (!)
The increased level and rising trend of state procurements at least loaded my expectations for May to the maximum, which made a basically good result a disappointment. The result of May’s procurements and the company’s revenue were indeed good compared to 2019. This year’s state procurements seem to be permanently at a higher level than last year, so at least on the public sector side, we can expect more “good” things 
Where is the data behind these graphs available?
Tutkihankintoja.fi. Of course, it should be noted that this doesn’t tell the whole truth about Gofore’s business, but it’s one metric I use. Recruitment advertisements are an example of another similar open data source. In general, small investors should seek an information advantage from alternative data sources because Banker McBankface and Daisy Institutional Investor don’t bother to put in as much effort when it comes to such small companies.
Joni released a new company report, increasing the target price to 9€:
@Joni_Gronqvist, I’d like to ask about the headcount for the rest of the year.
The report states ‘Henkilöstökasvu, kk’ (Personnel growth, months) for August/September/October as +2, but the headcount is predicted to remain unchanged? How should this be interpreted?
