myTaste: Transition period2017-03-29 10:35, Edited at: 2017-03-29 10:52
During Q4’16 myTaste’s net sales and result came in above expectations. However, we find the short-term financials of less importance. The primary value driver is the transition into a true social network for online recipes.
Our largest concern in the report was the dropping web visitor numbers, due to a Google search algorithm update. myTaste have launched an SEO fix, so the traffic should return to normal levels. Development intensifies, upcoming features include a Blog Analytics tool, Notification Center and more.
We have adjusted our forecast downwards due to a longer transition period than previously expected. Our new Estimated Fair value, in Base-case, amounts to 17 (23) SEK per share. The share price has been under pressure, likely due to impatient investors, the lower website traffic, and dropping app ratings. We find that the traffic on the web is under control, and the upcoming features could boost app user numbers significantly. We argue that a good thing takes some time to create; persistence is the key to success.