Cloud Media And 5G Will Revolutionize Live Event Production

Key Takeaways

• Regulatory-driven demand for secure, GNSS-independent time synchronization and cloud-based media solutions could make Net Insight a default vendor with strong recurring revenues.
  
• Expanding global partnerships and the surge in remote event production position Net Insight to dominate a rapidly growing, high-margin market with long-term contract stickiness.
  
• High customer concentration, persistent cash outflows, and margin pressures from R&D investments undermine stability amid rapid industry change and uncertain order pipelines.

Catalysts

Provides media network solutions worldwide.

• While analysts broadly agree that GNSS-independent time synchronization will see strong demand from 5G operators and public networks, they may significantly underappreciate both the magnitude and urgency-regulatory and security-driven mandates are likely to accelerate mass adoption globally, potentially unlocking step-function revenue and high-margin software license streams as customers find switching costs prohibitively high.
  
• Analyst consensus sees new media product launches and media market expansion driving steady improvements, but the rapid shift from satellite to cloud and the surge in remote and live-event production is likely to create a winner-takes-most dynamic, positioning Net Insight as a default vendor and driving exponential recurring revenue growth and operating margin expansion as high-capacity, IP-based solutions become entrenched across hundreds of venues.
  
• Net Insight is on the verge of leveraging its growing base of PoCs, pilots, and rollout-phase customers-now numbering over 15-with demonstrated high conversion rates; as several large-scale rollouts are set to begin in late 2025 and 2026, this "activation wave" of long-cycle deployments can lead to substantial, sustained increases in revenue and net margin, given the sticky, multi-year nature of these contracts.
  
• Deepening partnerships with key telecom operators, hyperscalers, and major broadcasters-particularly the ability to virtualize and integrate Net Insight's time sync software into broader ecosystems-offers the potential for outsized market penetration and deal sizes, which could rapidly diversify and accelerate top-line growth beyond current projections.
  
• Massive growth in global video traffic, the rise of distributed and esports production, and the industry-wide need for mission-critical, secure and low-latency media and timing solutions are set to turbocharge the addressable market, with Net Insight's focus and leadership in these converging demands likely translating to step-changes in subscription revenue, premium pricing power, and long-term earnings potential.

Net Insight Future Earnings and Revenue Growth

Assumptions

• This narrative explores a more optimistic perspective on Net Insight compared to the consensus, based on a Fair Value that aligns with the bullish cohort of analysts.
• The bullish analysts are assuming Net Insight's revenue will grow by 16.3% annually over the next 3 years.
• The bullish analysts assume that profit margins will increase from 0.3% today to 19.7% in 3 years time.
• The bullish analysts expect earnings to reach SEK 169.4 million (and earnings per share of SEK 0.5) by about August 2028, up from SEK 1.8 million today. The analysts are largely in agreement about this estimate.
• In order for the above numbers to justify the price target of the more bullish analyst cohort, the company would need to trade at a PE ratio of 20.9x on those 2028 earnings, down from 820.0x today. This future PE is lower than the current PE for the GB Communications industry at 51.7x.
• Analysts expect the number of shares outstanding to decline by 1.03% per year for the next 3 years.
• To value all of this in today's terms, we will use a discount rate of 5.94%, as per the Simply Wall St company report.

Net Insight Future Earnings Per Share Growth

Risks

• The company faces ongoing market uncertainty and risks of delayed or postponed orders, especially as decision cycles remain long and customers hesitate to make commitments, directly threatening revenue visibility and growth consistency.
  
• Cash flow has been negative for several quarters, largely due to weak results, rising working capital, and increased inventory levels, putting pressure on the balance sheet and heightening the risk of future liquidity constraints or the need for external funding.
  
• Significant customer concentration remains, as a large portion of new revenue and recurring revenue depends on just a few major deals, meaning the loss or delay of a key client or order could sharply reduce revenues and impact earnings stability.
  
• Aggressive investment in R&D and time synchronization has strained margins and earnings, with the segment yet to generate breakeven or offset the elevated operating expenses, raising the risk of further margin erosion if growth or adoption falters.
  
• The rapidly evolving media and networking landscape, marked by hyperscaler dominance, vertical integration by broadcasters, and commoditization of core solutions, increases the risk that Net Insight's specialized offerings will be displaced, resulting in sustained pricing pressure and compressed net margins over time.

Valuation

• The assumed bullish price target for Net Insight is SEK9.0, which is the highest price target estimate amongst analysts. This valuation is based on what can be assumed as the expectations of Net Insight's future earnings growth, profit margins and other risk factors from analysts on the bullish end of the spectrum.
• However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of SEK9.0, and the most bearish reporting a price target of just SEK5.5.
• In order for you to agree with the bullish analysts, you'd need to believe that by 2028, revenues will be SEK859.8 million, earnings will come to SEK169.4 million, and it would be trading on a PE ratio of 20.9x, assuming you use a discount rate of 5.9%.
• Given the current share price of SEK4.24, the bullish analyst price target of SEK9.0 is 52.9% 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.