Platform Integration And Data Partnerships Will Support Stronger Long Term Earnings Potential

Catalysts

About Cint Group

Cint Group operates a global, programmatic exchange that connects buyers and suppliers of market research and media measurement data.

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

• Completion of the multiyear platform integration and migration should remove operational drag, enabling higher throughput on a single scalable exchange and supporting a recovery in net sales growth and operating leverage. This can in turn lift EBITA margins.
• Ongoing shift toward data driven advertising and measurable campaign outcomes increases demand for Cint’s Media Measurement and exchange products. This positions the company to capture higher wallet share from existing clients and drive sustained revenue growth.
• Reallocation of R&D from platform build to innovation, including tools such as the Lucy chatbot and advanced analytics, is likely to deepen customer stickiness and upsell potential. This supports higher recurring revenue and improved earnings visibility.
• Enhanced data assets from partnerships like Affinity Solutions, which link advertising exposure to actual purchase behavior, can justify premium pricing and expand use cases across both Media Measurement and Exchange. This may have a positive impact on gross margins and long term earnings power.
• A stronger balance sheet with low leverage and consistently improving receivables and working capital efficiency provides capacity to reinvest in growth initiatives without dilution or financial strain. This supports future earnings growth and potential multiple expansion.

Assumptions

How have these above catalysts been quantified?

• Analysts are assuming Cint Group's revenue will grow by 4.2% annually over the next 3 years.
• Analysts assume that profit margins will shrink from 2.4% today to 1.7% in 3 years time.
• Analysts expect earnings to reach €2.9 million (and earnings per share of €0.01) by about December 2028, down from €3.7 million today. However, there is a considerable amount of disagreement amongst the analysts with the most bullish expecting €12.0 million in earnings, and the most bearish expecting €-4.3 million.
• 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 146.6x on those 2028 earnings, up from 24.8x today. This future PE is greater than the current PE for the SE Software industry at 27.1x.
• Analysts expect the number of shares outstanding to grow by 7.0% per year for the next 3 years.
• To value all of this in today's terms, we will use a discount rate of 8.14%, as per the Simply Wall St company report.

Risks

What could happen that would invalidate this narrative?

• The prolonged weak business climate for market research and advertising, including documented reductions in client spend and pauses in ad budgets due to macro uncertainty and tariffs, could become a structural rather than cyclical headwind, depressing net sales and limiting operating leverage, which would weigh on earnings over time.
• If the final stages of platform migration for the largest and most complex customers remain disruptive for longer than management anticipates, or if any of these clients churn or permanently reduce volume during the transition, the current low point in revenue could become a new baseline, pressuring both revenue and EBITA margins.
• The heavy reliance of Media Measurement on U.S. political advertising cycles and a predominantly U.S. customer base means that shifts in political spending patterns, regulatory changes or longer term budget reallocations away from measurement could increase cyclicality and volatility in revenue and gross profit.
• The strategy of reinvesting cash flows into growth initiatives, coupled with stable rather than shrinking operating costs and continued capitalization of development expenditure, could fail to translate into sufficient incremental growth, resulting in structurally lower profitability and constrained free cash flow despite a low leverage ratio.
• Long-term success depends on innovations such as the Lucy chatbot and the Affinity Solutions data partnership driving higher wallet share and premium pricing, but if competing platforms offer similar capabilities or customers do not materially expand usage, the anticipated uplift in net sales and sustainable margin expansion may not materialize.

Valuation

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

• The analysts have a consensus price target of SEK8.45 for Cint 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 2028, revenues will be €174.3 million, earnings will come to €2.9 million, and it would be trading on a PE ratio of 146.6x, assuming you use a discount rate of 8.1%.
  
• Given the current share price of SEK2.8, the analyst price target of SEK8.45 is 66.9% higher. Despite analysts expecting the underlying business to decline, they seem to believe it's more valuable than what the market thinks.
  
• 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.