In this equity report, analysts Adrian Elmlund and Elsa Adolfsson take a closer look at ZignSec AB (or “ZignSec”), a Swedish ID-verification provider for B2C companies, and the only publicly listed RegTech company on the NASDAQ composite. The analysts estimate a sales CAGR of 88.2% 2020E-2023E to outgrow the ID-verification market CAGR of 13.1% 2019A-2023E and thereby gain market shares. With estimates outperforming comparable companies and accounting for ZignSec’s smaller size, a potential upside of 59.8% is implied.
Investment highlights:
- The one-stop-shop ID verification platform allows B2C companies to use several digital verification methods via a single API in over 200 countries.
- ZignSec is estimated to outgrow the underlying market CAGR of 13.1% 2019A-2023E, by increasing recurring revenues with a sales CAGR of 88.2% between 2020E-2023E.
- Due to the higher sales CAGR of 88.2% and the smaller market cap, the valuation is based on the peer’s median forward-looking EV/S multiple of 7.6x, implying a 59.8% upside.
