(Finance) – Banca Finnat has started hedging the stock Execution, a company operating in the social selling sector which has been listed on Euronext Growth Milan since 4 August. The target price was set at 6.9 euros per share (compared to a placement price it was equal to 1.67 euro per share), while the judgment on the title is “Buy“.
Analysts explain that the company aims to become the main European platform of scalable solutions for lead generation and management for corporate sales networks and freelancers. The operating model of Execus provides two types of sales: direct and indirect. The former concern revenues generated through an internal sales network, made up of agents, business brokers and consultants, while the latter are achieved through distribution agreements with third parties.
For the period 2022-2026, Banca Finnat estimates an average annual growth of production value equal to 57.09%. L’EBITDA at the end of the forecast period, it should settle at 8.1 million euros from 1.6 million euros expected at the end of 2023 (CAGR equal to 62.20%). L’Net income it should be able to reach 5.6 million euros in 2026 from the 999 thousand euros expected at the end of 2023, for an average annual growth rate of 68.95%.
Between strengths of the company are mentioned: proven experience in the sector both in terms of turnover and in terms of margins, supported by a solid net financial position. Furthermore, the company has built a long-term relationship with their own
distributors who promote and sell its innovative products to a market that has been able to appreciate, over the years, the quality of the solutions offered by Execus.
The opportunity indicated are: Execus’ reference market is a rapidly growing market that offers its players the possibility of growing beyond national borders. Technological innovation also provides companies with tools to further develop their product offerings.
The major weaknesses are: market with few barriers to entry and significant dependence, in terms of turnover, on the main distributors (73% of turnover as at 31 December 2022).
Also, the majors market risks are: the loss of the distribution agreements in place with the main partners as well as the entry into the market of new players which could reduce the current profit margins.