Emergers: Equity Research | FOM TECHNOLOGIES: Ready for takeoff
FOM is active in the small but fast growing market for coating solutions to the renewable energy sector. The client list reveals a market leading position. We expect continued double-digit revenue growth with bottom-line profits.
Hypergrowth market
We estimate FOM’s addressable market to grow by 40-50% annually in the coming 5 years. The strong growth is a function of high demand and a small base. We estimate FOM’s addressable market to be worth USD ~20m which could grow to USD ~128m by 2026. We forecast FOM’s sales to grow in line with the market from DKK 24m in 2021 to DKK 77m in 2024 (CAGR +47%) with Net profits increasing from DKK 1.6m to DKK 4.6m during the same period.
Market leading position
The client list includes XEROX, First Solar (PV), Rivian (EV), Livent (Lithium batteries), and the US Department of Energy. Why do global corporations buy coating machines from a small Danish company? We believe it is because they provide the best product i.e., FOM is the market leader in our view.
Base case Fair value DKK 55.00/shr.
Our Base case DCF Fair value is DKK 55.00/shr., which assumes a terminal EBIT margin of 15%. We believe FOM could be in the beginning of a long-term above normal growth journey driven by the renewable energy industry’s need for new coating solutions.
Read the full report here https://www.emergers.se/fom_a/
This is a equity research collaboration with Enlight Research.
For more information see https://www.enlightresearch.net