Consolidation Of Pricewise And Azimut Partnership May Strengthen Future Outlook

Key Takeaways

• Expanding mortgage market recovery and international comparisons consolidation may drive revenue growth significantly.
  
• Strong leasing operations and increased service demand in claims could boost revenue and operating margins.
  
• Profitability may be impacted by inefficiencies, financial pressures, acquisition-related liabilities, potential web tax introduction, and unpredictable weather effects on the BPO division.

Catalysts

Through its subsidiaries, operates comparison platforms, and provides outsourcing services for credit processes, and asset and insurance claims management in Italy.

• The progressive improvement in mortgage volumes and expected continued recovery in the mortgage market may enhance revenues, contributing to future growth.
  
• The positive outlook for insurance broking, e-commerce price comparison, and Telco & Energy comparison, especially with international expansion like the consolidation of Pricewise, could drive revenue growth.
  
• Increased demand and potential for expanded services in claims management, due to ongoing meteorological events, may bolster margins and revenue.
  
• The resilience and unexpected strong performance of the leasing operations segment provide a potential boost to both revenue and operating margins.
  
• The stated interest and potential new contracts in Moltiply Wealth, alongside continued partnerships like those with Azimut, may support stable revenue and possibly improve margins over time.

Moltiply Group Future Earnings and Revenue Growth

Assumptions

• Analysts are assuming Moltiply Group's revenue will grow by 7.2% annually over the next 3 years.
• Analysts assume that profit margins will increase from 7.5% today to 15.9% in 3 years time.
• Analysts expect earnings to reach €87.8 million (and earnings per share of €1.87) by about February 2028, up from €33.8 million today.
• In order for the above numbers to justify the analysts price target, the company would need to trade at a PE ratio of 26.8x on those 2028 earnings, down from 41.8x today. This future PE is lower than the current PE for the GB Consumer Finance industry at 65.7x.
• Analysts expect the number of shares outstanding to grow by 0.07% per year for the next 3 years.
• To value all of this in today's terms, we will use a discount rate of 10.65%, as per the Simply Wall St company report.

Moltiply Group Future Earnings Per Share Growth

Risks

• The decline in EBIT year-on-year, despite an increase in revenue and EBITDA, suggests potential inefficiencies or increased costs that may affect profitability. This could impact net margins.
  
• The net income decline of 14.9% year-on-year indicates potential issues with cost management or other financial pressures, adversely affecting overall profitability.
  
• The impact from the acquisition-related cash outflows, as evidenced by the increase in net financial position liability, could constrain future investment capabilities if not managed carefully, potentially affecting earnings.
  
• The potential introduction of a web tax could reduce net margins for the e-commerce business by imposing additional financial burdens, affecting overall profitability.
  
• The effects of meteorological events on claims management could be unpredictable, leading to volatility in revenue and operating margins from the BPO division.

Valuation

• The analysts have a consensus price target of €46.9 for Moltiply Group based on their expectations of its future earnings growth, profit margins and other risk factors.
  
• In order for you to agree with the analyst's consensus, you'd need to believe that by 2028, revenues will be €552.7 million, earnings will come to €87.8 million, and it would be trading on a PE ratio of 26.8x, assuming you use a discount rate of 10.7%.
  
• Given the current share price of €37.8, the analyst price target of €46.9 is 19.4% higher.
  
• We always encourage you to reach your own conclusions though. So sense check these analyst numbers against your own assumptions and expectations based on your understanding of the business and what you believe is probable.