Inderes Group - Signs of life in the IPO market - SEB

Inderes posted a solid Q3 report, with sales up 11.5% in a tough market. Our read is that while headwinds remain for the underlying market, growth was delivered by cross-selling and gradual steps in Sweden. Positively, the company sees improving signs in the IPO funnel. We share the company’s view and think the IPO market could reopen; we lift our 2024-26 estimates and raise our fair value range to EUR 21-23 (EUR 19-21).

Q3 outcome: Beat owing to event projects in September

Our read is that Inderes’ Q3 earnings beat was largely thanks to improved event project activity in Sweden, which had a favourable timing effect in September. Hence, we do not extrapolate the beat to Q4. However, we raise our 2025 estimates following signs of a revival in IPO activity. Also, the number of commissioned research contracts was again above our estimate.

2025 could also welcome market-driven growth

Should improved IPO activity materialise, it means a growing market for Inderes. In addition to a high win-rate in research agreements among newly listed companies, we think selling the whole product range to IPO candidates is relatively easy. On top of market growth, Inderes should still be able to increase market penetration in AGM services and IR software. However, the market environment remains uncertain and new geopolitical tensions or financial market woes could see the planned IPOs pulled. In Sweden, Inderes’ growth remains less dependent on market growth. Inderes keeps winning new deals but at relatively slow pace, as introducing Inderes’ research model takes time. However, we continue to think that once critical mass is reached, Swedish growth could accelerate. However, defining such a point remains difficult.

Fair value range raised to EUR 21-23

2025E-26E EBITA rises by 6%. We also see a reduced risk of estimates falling, which lets us raise our fair value range.