Software-Defined Collaboration Shift And Defense Demand Will Drive Long-Term Opportunity

Catalysts

About Cyviz

Cyviz delivers integrated visualization, collaboration and control room solutions built on a scalable software and hardware platform.

What are the underlying business or industry changes driving this perspective?

• An accelerating shift toward software-defined collaboration environments positions Cyviz to grow higher-margin platform and management software subscriptions, supporting faster annual recurring revenue expansion and structurally higher net margins.
• The migration of two of the company’s largest global accounts onto the new software platform can trigger broader rollouts, drive upselling of multiyear support and SaaS, and create reference wins that may support revenue growth and earnings visibility.
• Rapid build-out of the partner ecosystem, supported by UX and API enhancements, should allow Cyviz to scale globally with lower selling costs per project, potentially lifting topline growth while improving EBITDA margins as partner-led sales increase.
• Growing defense and NATO-driven investments in digital command, control and visualization capabilities in Europe create a sizable, multiyear project pipeline that can support higher backlog, more stable revenues and improved operating leverage.
• The resumption of delayed Middle East and APAC projects following geopolitical disruptions, combined with new energy sector wins in North America and India, provides potential cyclical recovery on top of long-term demand, supporting revenue growth and cash generation.

Assumptions

How have these above catalysts been quantified?

• Analysts are assuming Cyviz's revenue will grow by 28.3% annually over the next 3 years.
• Analysts assume that profit margins will increase from 0.1% today to 24.4% in 3 years time.
• Analysts expect earnings to reach NOK 283.2 million (and earnings per share of NOK 21.33) by about December 2028, up from NOK 389.0 thousand today.
• In order for the above numbers to justify the price target of the analysts, the company would need to trade at a PE ratio of 3.4x on those 2028 earnings, down from 1230.8x today. This future PE is lower than the current PE for the NO IT industry at 21.6x.
• Analysts expect the number of shares outstanding to grow by 0.38% per year for the next 3 years.
• To value all of this in today's terms, we will use a discount rate of 8.32%, as per the Simply Wall St company report.

Risks

What could happen that would invalidate this narrative?

• The company remains heavily exposed to large, lumpy project sales and order timing, so prolonged softness in project activity or further slippages beyond Q4 could lead to persistently weak top line growth and underutilized capacity, weighing on revenue and EBITDA.
• Geopolitical instability in key growth regions such as the Middle East and parts of APAC could keep pushing sizeable projects into future periods or cause cancellations, which would undermine the expected regional recovery and constrain revenue and earnings progression.
• The strategic pivot to a higher margin platform and ARR model may take longer or prove more costly than anticipated if partner activation, customer migrations or UX and API enhancements do not scale as planned, delaying the expansion of recurring revenues and net margins.
• Competition from larger global players and systems integrators in visualization and collaboration solutions could intensify, eroding Cyviz's pricing power and win rates in new logos and defense contracts, putting pressure on revenue growth and gross margins.
• The company has acknowledged a weak balance sheet and stalled profitability in recent years, so any setback in executing its long term plan or in securing additional capital or strategic acquisitions could limit investment in R&D and sales capacity, constraining future earnings growth.

Valuation

How have all the factors above been brought together to estimate a fair value?

• The analysts have a consensus price target of NOK58.0 for Cyviz based on their expectations of its future earnings growth, profit margins and other risk factors.
  
• In order for you to agree with the analysts, you'd need to believe that by 2028, revenues will be NOK1.2 billion, earnings will come to NOK283.2 million, and it would be trading on a PE ratio of 3.4x, assuming you use a discount rate of 8.3%.
  
• Given the current share price of NOK36.8, the analyst price target of NOK58.0 is 36.6% 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.