VERI

Verisec

Research update

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Verisec: En Route for Growth?

Verisec reported revenues of SEK 18.4 million and thus somewhat missed our revenue estimate of SEK 21 million in Q4. Reported EBIT was SEK -0.7 million versus our estimate of SEK 0 million, driven primarily by somewhat lower operational costs.

Continued progress is being made as BBVA is beginning to implemen its Freja ID solution in US and other countries for both retail and corporate customers. The progress will likely result in improved financial performance during 2016 which are largely discounted in our intrinsic value. The competition remains intense and the company must be able to swiftly adapt to its changing competitive environment in the future.

Our DCF value of the company is maintained at 50 SEK per share in our base case, while our bear and bull case scenarios indicate SEK 30 and SEK 85, respectively. The BBVA progress is important, but does not change the investment case on its own.

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