This analysis was prepared by mBank at the request of the WSE as part of the Exchange's Analytical Coverage Support Programme
sell (reiterated)
We maintain our negative outlook for Sygnity. Although sales revenues have followed an upward trend for several quarters with a clear acceleration in Q2 2022, the wage pressure in the IT sector remains strong (at least +10% y/y). Therefore, we still expect a slight deterioration of the profitability in results in the coming quarters. Our EBITDA forecast for the period 2022/23 is PLN 42.0 million (no change vs. the previous report of October 2022), and the net profit of PLN 25.4 million.
The expected level of results implies EV/EBITDA and P/E at 10.3x and 17.8x, respectively, showing substantial premiums to peers., The level of ratios is higher than valuations of Asseco Poland or Comarch. Both companies are (also due to the size and liquidity) interesting investment types at the current level of share prices.
In our valuation model, we assume the level of market risk in the DCF model = 6.00% and a new level of RFRs in the period 2022/30. We our new target price at PLN 13.70 (impact of updated peer multiples), which implies almost 39% downside potential and a reiterated sell recommendation.
Analyst: Paweł Szpigiel +48 509 603 258 pawel.szpigiel@mbank.pl
GPW’s Analytical Coverage Support Programme 3.0
