Analysts believe the stock market crash made Kahoot shares ‘too cheap’

Analysts believe the stock market crash made Kahoot shares 'too cheap'

The conclusion is that the stake is very cheap.

Austin Elton Ludgaard, an analyst at ABG Sundal Collier, told DN after the games and e-learning company Kahoot more than doubled its sales in the first three months of the year.

The market reacted first by sending Kahoot stock sharply lower on Wednesday, and in the opening minutes, Kahoot stock was down 3.7 percent. Then the mood turned, and in the morning the stock rose about five percent, before falling again.

At 12 noon the stock was trading around 22.5 crowns – and it looks like Lodgaard, who is following the company closely, should be joined by investors.

You get a company with a unique global standing and a profitable and scalable business model at a very low price.

However, during the afternoon Kahoot stock rose sharply again, and less than an hour before the close on the Oslo Stock Exchange, the stock rose more than seven percent and traded for NOK 23.7.

Eilert Hanoa, Kahoot’s CEO, told DN he was “on the whole” satisfied with what the company delivered on Wednesday.

It’s been a turbulent quarter in the global economy, with the pandemic still marking the new year and a full-blown war in Ukraine. But with a strong finish we were able to hit the billing goal of $34 million. We are very happy, but we have a lot to continue in the future.

Post-pandemic retreat

However, turmoil in the stock market is nothing new to Kahut. The company was in fact one of the biggest gainers of the pandemic on the stock exchange, before going downstairs when the mood for developing stocks soured.

At the beginning of last year, the share peaked at NOK 123, but since then the share has fallen by more than 80 percent.

Despite the brutal fall, Ludgaard believes the gaming and e-learning company’s website is actually pretty good.

Analyst Øystein Elton Lodgaard at ABG Sundal Collier believes this is an opportunity to secure a good stake at a low price.

Analyst Øystein Elton Lodgaard at ABG Sundal Collier believes this is an opportunity to secure a good stake at a low price. (Photo: ABG Sundal Collier)

– Interestingly, Kahut continues to strengthen his standing in the school. After Google Apps and Youtube, Kahoot and Clever are the two most used digital learning tool in American school. that’s cool. While many other companies that have grown in strength during the pandemic, such as Zoom, drop out of the first list entirely.

An important part of the strategy is to recruit users with free products, and try to convert them into paying customers, and investors and analysts are following this range closely.

The number of active accounts on Kahoot increased six percent to 29.9 million compared to the same quarter last year. Of those, 1.2 million customers are paying.

Despite this, Kahut wrote in the report that he has seen a “post-pandemic” decline in non-paying personal users, compared to last year’s highs.

Ambitious growth goals

Ludgaard notes that the numbers for billed income, organic growth and guidance for the second quarter beat ABG Sundal Collier’s estimates. In the second quarter, Kahoot expects to generate revenue of over NOK 338.8 million.

For her part, Arctic Analyst Henriette Trondsen noted that there were low expectations associated with Kahut’s quarterly report this time, and that the numbers were roughly in line with those expectations.

Analyst Henriette Trondsen at Arctic Securities says the market does not expect Kahoot to provide guidance for this year.

Analyst Henriette Trondsen at Arctic Securities says the market does not expect Kahoot to provide guidance for this year. (Photo: Gunnar Lear)

But Kahut has ambitious plans, and expects the company to bill more than half a billion dollars through 2025, more than 4.4 billion crowns. However, many analysts covering Kahoot’s news have expressed skepticism about the company’s growth goals.

One of these is Trondsen. Nor does it believe the company will reach the stated goal of revenue of more than $190 million – or just over $1.9 billion – by 2022.

– Guidance for the second and third quarters on revenue says it could come roughly on my estimate for 2022, which is a bit lower than the 2022 guidance. The market doesn’t expect Kahoot to hit the guideline for 2022, as I wrote in an email to DN.

Arctic maintains a buy recommendation for the stock with a price target of NOK 50. At the same time, the company wrote that it expects to make smaller reductions in estimates.

Biggest owner in trouble

Recently, the largest owner, Softbank, weighed in on Kahoot stock. The Japanese tech conglomerate bought up to the next 17 percent of the shares within a few months of the end of 2020, for a total of five billion crowns. Today, the same item is worth 1.8 billion kroner, giving a paper loss of 3.2 billion to the Japanese.

This isn’t the only blow that softbank and eccentric entrepreneur “Massa” Son have taken after the frenzy of boom that marked the emerging and developing market, which turned around last year. At the beginning of April, it became clear that Softbank was slowing down its investments and liquidating failed investments. and that the Swedish representative of Softbank on the Kahoot board of directors should have resigned.

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Hanisi Anenih

Hanisi Anenih

"Web specialist. Lifelong zombie maven. Coffee ninja. Hipster-friendly analyst."

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