In this equity research report, Adam Andre and August Winzell take a closer look at Veteranpoolen (VPAB), a senior staffing company operating in Sweden. The analysts estimate that Veteranpoolens decentralized business model, key investments in digital solutions will lead to operating leverage and that the expansion into new market segments will pave the way for a net sales CAGR of 12.5% between 2021A-2023E. A target EV/EBIT multiple of 17.5x 2023E justifies a target price of SEK 69.5, indicating a potential upside of 48.5%.
Investment highlights:
- Investments in digital solutions that will further streamline their administrative process. EBIT margin to estimated to reach 12.0% in 2023E.
- Underlying market trends such as demography benefitting Veteranpoolens decentralized business model which is expanding as a franchise structure.
- Revenue expected to grow from SEK 388.7mn in 2021A to SEK 568.9mn in 2023E.