In this equity research report, analysts Björn Jönsson and Felix Young take a closer look at the Norwegian home textile and interior retail company KID Interior (KID). The analysts estimate an online revenue CAGR of 42.8% 2021A-2025E, primarily driven by KID’s strong brand recognition, market share and beneficial customer club. Furthermore, a peer valuation and a discount based on size difference justify a target multiple of 10.1x EV/EBIT in 2023E, resulting in a fair value of NOK 103.9 per share and a potential upside of 44.5%.
Investment highlights:
- Strong internet presence with online sales to grow at a CAGR of 42.8% through 2025E
- Large control of the value chain resulting in a high gross margin of 63.0%
- Well positioned to expand the total number of stores by 10.8% through 2025E