Cherry: Increasingly attractive valuation2017-09-13 07:30
The numbers for the second quarter of 2017 came in spot-on our estimates. During the period Cherry Group produced sales of SEK 536m and an EBIT of SEK 60m. The strong profitability within Game Development and Performance-based Marketing impressed us the most.
We find that Cherry continues to focus on what is important; building long-term value. ComeOn! and the old Cherry iGaming could have been kept separately to boost short-term profits, but the company rather conduct the integration for better long-term results. A lowered guidance is, in our view, also an act in the best of interest for Cherry’s shareholders.
Due to only minor forecast adjustments our Fair Value estimate, in Base-case, is unchanged at 75 SEK per share. We view the valuation as increasingly attractive. Our supportive Sum-Of-The-Parts valuation also indicates a significant potential from today’s levels.