AVTECH: Awaiting Closing of Contracts
Research Update
2015-04-27
16:31
AVTECH reported a quarter with somewhat lower revenues than expected at 3.1 MSEK (estimated 5.4 MSEK). However, Aventus NowCast descent revenues was the primary contributor to the reported revenues by an estimated amount of 1.5 - 1.9 MSEK which was in line with our estimates. AVTECH is positioned for growth due to the largely untapped market and Southwest Airlines being a paramount reference customer to secure future Aventus NowCast contracts. Escalation in regulatory pressure from the US and Europe will also act as a demand driver. At an entity level, there has been no changes in our DCF and multiple analysis which indicates a value of 7 SEK per share with a cash position of approximately 40 MSEK. Thus, future revenue growth is by large priced in today.The bear and bull case scenarios indicate 4.5 SEK and 15 SEK respectively.
PS
Philip Skogby
Disclosures and disclaimers