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Enea AB (publ)

Technology
ENEA.ST: 

Research

  • Buy by micke (10/01/2024)
    • 80.00 +36.29% on 31/05/2024

    ENEA is niche player with several software products within telecom 5G and Cyber security. The company has struggled with slow adoption of there 5G network offerings. Telecom operators have been doing lower investments than anticipated by vendors. The ENEA CEO was replaced and major write downs in 2023Q2. Share buy backs 2023Q3 and 2023Q4, seems like a good move due to good cash-flow and low valuation. The stock seems like a potential turn-around with high risk and potential for the next years. Today (2024-01-10) at 58.80, I think it is a BUY, with high potential and high risk.

  • Business (4)

    • Revenue Segmentation

      Network Solutions 88% of sales and Operating systems 12% of sales. Staring 2024Q1 the segmentation will be Networks, Security, OS. Images below from ENEA's 2023Q4 report.

      imageimageimage


      03/02/2024 by MICKE｜
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    • Very interesting potential within Cyber Security

      The products, roadmap, focus and market conditions for cyber security look very good. During 2022/2023 ENEA has got several awars in this field. I think this is very interesting and could generate very good value going forward.

      10/01/2024 by MICKE｜
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    • 5G core software

      It has taken longer time for the investments to come, and it could very well take even more time than ENEA expects, but eventually it should come and generate revenue.

      10/01/2024 by MICKE｜
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    • Redeye analysis

      Valuation: Depressed share price does not include any market tailwind from 5G - nor that cost cuts themselves will lift proftiability

      https://www.redeye.se/research/947997/enea-q3-update


      10/01/2024 by MICKE｜
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  • People (1)

    • New CEO with good priorities

      The new CEO seems very focused on right sizing the company and putting very much focus on winning deals and being a excellent supplier in areas when ENEA has a high success rate and limiting efforts on products and customers where probability of sales are low. In general, I really liked his reasoning on the 2023Q2 an Q3 presentations.

      10/01/2024 by MICKE｜
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  • Financial (1)

    • 2023 Earning horrible but cash-flow good, and 2024 should be good

      The PE2023 will not be good, due to write downs and project cancellations. The cash-flow is good. Thus 2024 going forward should be fine.

      10/01/2024 by MICKE｜
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  • Risks (2)

    • Tough economic environment

      ENEA has not performed well the recent years, the new CEO might not be able to change this in a tough economic environment.

      10/01/2024 by MICKE｜
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    • Keep key personnel

      ENEA has procured several niche cyber security companies, there is always a risk that key people leave which would have very negative effect.

      10/01/2024 by MICKE｜
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