The conclusion is that the stake is very cheap.
Austin Elton Ludgaard, an analyst at ABG Sundal Collier, told DN after the games and e-learning company Kahoot more than doubled its sales in the first three months of the year.
The market reacted first by sending Kahoot stock sharply lower, and in the opening minutes Kahoot fell as much as 3.7 percent. Then the mood turned, and in the morning the stock rose about five percent, before falling again.
At 12:00, the stock is trading for about 22.5 crowns – and it looks like Lodgaard, who is following the company closely, should be joined by investors.
You get a company with a unique global standing and a profitable and scalable business model at a very low price.
Alerts about the “post-pandemic” decline in customers who do not pay
However, turmoil in the stock market is nothing new to Kahut. The company was in fact one of the biggest gainers of the pandemic on the stock exchange, just before it plummeted when the mood for developing stocks soured.
At the beginning of last year, the share peaked at NOK 123, but since then the share has fallen by more than 80 percent.
Despite the brutal fall, Ludgaard believes the gaming and e-learning company’s website is actually pretty good.
Analyst Øystein Elton Lodgaard at ABG Sundal Collier believes this is an opportunity to secure a good stake at a low price. (Photo: ABG Sundal Collier)
– Interestingly, Kahut continues to strengthen his standing in the school. After Google Apps and Youtube, Kahoot and Clever are the two most used digital learning tool in American school. that’s cool. While many other companies that have grown in strength during the pandemic, such as Zoom, drop out of the first list entirely.
An important part of the strategy is to recruit users with free products, and try to convert them into paying customers, and investors and analysts are following this range closely.
The number of active accounts on Kahoot increased six percent to 29.9 million compared to the same quarter last year. Of those, 1.2 million customers are paying.
Despite this, Kahut wrote in the report that he has seen a “post-pandemic” decline in non-paying personal users, compared to last year’s highs.
Ambitious growth goals
Ludgaard notes that the numbers for billed income, organic growth and guidance for the second quarter beat ABG Sundal Collier’s estimates. In the second quarter, Kahoot expects to generate revenue of over NOK 338.8 million.
For her part, Arctic Analyst Henriette Trondsen noted that there were low expectations associated with Kahut’s quarterly report this time, and that the numbers were roughly in line with those expectations.
Analyst Henriette Trondsen at Arctic Securities says the market does not expect Kahoot to provide guidance for this year. (Photo: Gunnar Lear)
But Kahut has ambitious plans, and expects the company to bill more than half a billion dollars through 2025, more than 4.4 billion crowns. However, several analysts who covered Kahoot’s news expressed skepticism about the companies’ growth targets.
One of these is Trondsen. Nor does it believe the company will reach the stated goal of revenue of more than $190 million — or just over $1.9 billion — by 2022.
– Guidance for the second and third quarters on revenue says it could come roughly on my estimate for 2022, which is a bit lower than the 2022 guidance. The market does not expect Kahoot to hit the guideline for 2022, as I wrote in an email to DN.
Arctic is holding the stock to a target price of NOK 50. At the same time, the company wrote that it expects to make smaller reductions in estimates.
Biggest owner in trouble
Recently, the largest owner, Softbank, weighed in on Kahoot stock. The Japanese tech conglomerate bought up to the next 17 percent of the shares within a few months of the end of 2020, for a total of five billion crowns. Today, the same item is worth 1.8 billion kroner, which is 3.2 billion notes for the Japanese.
That’s not the only blow dealt by Softbank and eccentric entrepreneur “Massa” Son, which has followed the frenzied ascent that has marked emerging and developing corporate markets, which turned around last year. At the beginning of April, it became clear that Softbank was slowing down its investments and liquidating failed investments. And that the Swedish representative of Softbank on the Kahoot board of directors should have resigned.
However, Lodgaard wouldn’t guess as to what that would mean for the company.
– It’s hard for me to say anything reasonable about this. He says it’s just a guess.
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