Touchtech AB

Touchtech AB

In this financial analysis report, analysts Herman Ljungberg and William Jonsson take a closer look at the Swedish based SaaS company Touchtech AB (TOUCH). The analysis estimates a revenue CAGR of 39.1% for 2020A-2023E, and Touchtech’s bottom-line turns positive in 2021E. However, continued and future lockdowns is still a significant risk, and a large spread in MCAP and EV compared to its peers justifies a discounted EV/EBIT multiple of 14.9x from the median 22.6x, implying an upside of 40.0%.

Investment highlights:

  • Touchtech’s products have shown to increase sales, service and reduce costs for their customers in both B2C and B2B environments.
  • Covid-19 is expected to be a catalyst for the digitalization of retail, which Tocutech enables, leading to a net income of SEK 14.8mn in 2023E.
  • Touchtech’s SaaS products are developed and ready for expansion with a low CAC for Touchtech, implying a greater EBIT margin than its peers of 44.5% for 2023E.