Short sellers
After a very sharp decline in the share price during 2023, in November 2023 short seller (Viceroy) claimed that the share price is now at expected levels ~20SEK, which probably means that they have covered their short positions. If other short sellers are doing the same this could drive the share price up. https://www.aktiespararna.se/nyheter/blankarprofilen-nu-ar-aktien-dar-vi-forvantade-oss
There are still quite many other short sellers in Hexatronic, who probably think that the stock is over valued.

The company's target of 12% ebita margin seams reasonable. HTRO expect 2024H2 to recover. I think it might take longer due to high interest rates that will postpone investments. If we choose to assume 8bn in sales with 12% margin = 0.96bn SEK as a guess for 2024, which is 130M lower than 2022, could give EPS24=3SEK, PE24=10 on today's share price of 30 SEK. If we assume 2023Q4 level of 0.94SEK we have EPS24=3.76, PE24=8. There should be low downside and good upside potential if interest rates fall and the fiber market has grows.

Hexatronic consists of many small companies

As of date there seems to be around 32 different subsidiaries. I think this is a lot, which might be very good in the long run with cross sales and other benefits from being part of a network of companies. From my perspective there is also a risk that it will be complicated to get synergies and that the individual subsidiaries are too small to thrive when the original owners have left. Buying companies also drives up debt within Hexatronic, i.e. cost of capital.

Organic revenue is declining in 2023Q4

On group level organic revenue is declining 2023Q4 vs 2023Q4, but increases including driven by acquisitions. I think this decline will be bigger in 2024Q1 due to higher numbers in 2023Q1. There also seems to be less acquisitions in 2024, thus the group revenue for 2024 might be lower than for 2023 which I don't think analysts have in their assumptions.

Business development Europe (47% of group revenue): Sales in line with corresponding period last year due to acquisitions. Organic decline primarily due to Germany and partly UK. Positive development in Data Center and acquisition of Fibron.

(Image above from 2023Q4 presentation)

Business development North America (36% of group revenue): Sales in line with corresponding period last year due to acquisitions. Organic decline primarily due to Germany and partly UK. Positive development in Data Center and acquisition of Fibron.

I predict 2024 to be OK

I interpret the market as; the management with CEO Henrik Larsson Lyon has gone from very respected in 2022 to almost not trust worthy in 2023, and normalized as an average CEO in 2024. In my opinion the management seem OK, the market communication during 2023 wasn’t good, now they seem to be more careful in their statements.

Debt was increasing, but lower in 2023Q4

Positive that Hexatronic has strong cash flow and been able to reduce debt.

On 21 Nov 2023 Hexatronic announced that short term ebita-margin is expected to be in the range 12-14 percent, down from previous target 15-17 percent. The higher target of 15-17 percent was announced early 2023, previous it was 12%, which now seems like a very bad timing. Since they as late as the 2023Q3 presentation talked about decline but where clear that the 15-17% was firm, the share crashed down 36%.
(On HTRO website 21 November) The EBITA margin (earnings before amortisation of intangible assets) should be 15-17 % over a business cycle. The EBITA margin on a rolling 12-month basis on June 30, 2023, was 17,7%.

There is a risk that markets can get saturated, i.e. Sweden have installed fiber to home for years and the pace is now much slower. HTRO are investing in other segments such as datacenters and harsh environments, maybe it is good but it comes with higher debt for the company.