Biometric Verification Demand And Platform Partnerships Will Support A Stronger Future Earnings Profile

Catalysts

About Checkin.Com Group

Checkin.Com Group provides software that helps companies verify and onboard users through biometric and facial recognition technology across digital channels.

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

• Growing global requirements to verify end users and combat AI driven fraud and deepfakes are increasing demand for biometric and facial recognition solutions, which can support revenue growth for Checkin.Com Group over time.
• The agreement to be integrated into Visma Group's platform creates access to a broad base of enterprise customers through one channel, which can add recurring license and volume based revenues with limited incremental selling costs and support EBITDA margins.
• Partnerships with large omnichannel casino groups such as SkyCity and Casino Barrière position the company in segments that are moving from physical to digital interactions, which can lift software usage volumes and variable fee income, supporting both revenue and gross profit.
• The focus on distributor and platform deals, where one reported customer can represent many end users, can scale usage without a similar increase in operating expenses. This can help earnings and sustain higher EBITDA margins if revenues rise.
• Ongoing cost optimization, including server and other direct costs, together with largely fixed or semi fixed cost structures, means that any future revenue growth can have a relatively higher impact on gross margin and EBITDA margin and thereby on earnings.

Assumptions

How have these above catalysts been quantified?

• Analysts are assuming Checkin.Com Group's revenue will decrease by 1.8% annually over the next 3 years.
• Analysts are not forecasting that Checkin.Com Group will become profitable in next 3 years. To represent the Analyst Price Target as a Future PE Valuation we will estimate Checkin.Com Group's profit margin will increase from -21.8% to the average SE Software industry of 13.1% in 3 years.
• If Checkin.Com Group's profit margin were to converge on the industry average, you could expect earnings to reach SEK 11.4 million (and earnings per share of SEK 0.38) by about January 2029, up from SEK -20.0 million 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 20.5x on those 2029 earnings, up from -5.4x today. This future PE is lower than the current PE for the SE Software industry at 26.0x.
• Analysts expect the number of shares outstanding to remain consistent over the next 3 years.
• To value all of this in today's terms, we will use a discount rate of 6.51%, as per the Simply Wall St company report.

Risks

What could happen that would invalidate this narrative?

• Net revenue declined by 6% year on year and 4% quarter on quarter in Q3 2025, with weaker demand from existing customers and the loss of a previously large customer, RingCentral. This signals that end market demand and customer retention may be fragile, putting ongoing pressure on revenue and earnings.
• The company is heavily focused on cost savings, with EBITDA margin at 35% in Q3 2025. However, management has suspended the long term Rule of 40 growth and profitability target and is cautious about giving margin guidance, which could indicate that profitability may be reliant on cost cutting rather than sustained top line growth, affecting long term earnings quality.
• Gross margin has fallen from around 80% in 2023 to 73% in the last year. Management links margin improvement mainly to revenue growth over largely fixed or semi fixed direct costs. If revenue does not recover as expected, gross margin and EBITDA margin could remain under pressure, limiting earnings.
• New distribution and platform partnerships such as Visma and omnichannel casino deals are counted as single customers and are only just beginning to contribute. Management does not expect material revenue from Visma in the current year, so there is a risk that these long term distribution bets scale more slowly than hoped, which would weigh on revenue and delay any improvement in earnings.
• The travel segment has underperformed financially and a new travel product launched in 2024 has not expanded beyond the initial market. Management is reallocating focus to other industries where they see more momentum, which suggests that exposure to weaker verticals and shifting focus between segments could create inconsistent revenue trends and volatile margins.

Valuation

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

• The analysts have a consensus price target of SEK6.5 for Checkin.Com Group 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 2029, revenues will be SEK86.9 million, earnings will come to SEK11.4 million, and it would be trading on a PE ratio of 20.5x, assuming you use a discount rate of 6.5%.
  
• Given the current share price of SEK3.62, the analyst price target of SEK6.5 is 44.3% 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.