What an apathetic start to the year! The “re-evaluation” of the growth strategy, or in other words, profitable growth instead of a vigorous, front-loaded growth surge, is not a surprise. Although growth is still promised from Q2 onwards, it is clear that the target reiterated in December (revenue of 300 MUSD by 2024) will not be met.
Pareto’s comment mentioned Cisco’s revitalization as one reason for the weak performance. This could explain the negative turn in American growth. In any case, it’s concerning when you’re on a collision course with such a big player and its cash (read: predatory pricing).
Target price updates, quite a spread:
Arctic, 65 → 60 NOK (buy)
Pareto, 70 → 26 NOK (hold)
Pareto’s comment, translated from Avanza’s pages, describes Pexip’s dilemma well - when it’s not growing and cash is leaking, the story of a growth stock turning into a bad value stock hurts the target price.
Pareto remains positive to Pexip in the long term but thinks that the low multiple of 2 times EV / ARR is reasonably given the combination of low growth and negative cash flows. Pexip is also described as being an interesting buying candidate in a market that has high acquisition activity.