The Fanatec logo of Endor AG has a dominant percentage of 80% in the market for high-end racing steering wheels and accessories, a category in which interest has exploded COVID-19.
Managed through an owner-operator, Endor increased profit expansion to 40% for 10 years prior to COVID-19. Revenues for the first quarter increased by 90% (i.e. before COVID-19), with the secular force of the expansion trend appearing.
Despite the 90% profit expansion this year and 30% for the foreseeable future, Endor still trades at 13x/10x 21E/22E P/E and 9x/7x 21E/22E EV/EBIT in my figures.
This reduction to prototypical valuations of a category-killing expansion inventory is largely technical and non-basic (German inventory market listing; small capitalization, no English disclosure), but will improve, helping to decrease the reduction in valuation.
The action has had a strong career has not yet been discovered, and deserves rather double to reflect the very hot multi-year opportunity that awaits you.
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What if I told you that there is a small and incredibly fast business in development in an active (and active) sector, through a founding owner-trader who still owned 44% of the shares; which already had a dominant position on the logo and high-end products; it was also beneficial, but saw an explosion in operating profit as hockey revenues stagnated; and who didn’t have significant debt, is that something I might be interested in? What if I additionally told you that this same company was trading at only 13 times the profits of 2021E and approximately 9 times the EBIT? – Do you suggest that expansion rates appear to be sustainable enough in the short term? How interested would you be?
“Endor: sales target of 150 to two hundred million euros” The pandemic has blown up the Endor business (Sim Racing in a position of genuine racing). The activity in April and May would have exceeded all expectations of the mileage board. A massive number is expected in the second quarter. The Vorstandswoche estimates sales expansion from up to 100 percent to 80 million euros by 2020. Earnings are expected to double at least 8 million euros or even succeed at 10 million euros. By 2021, the new generations of consoles would seamlessly surpass the one hundred million euro mark in sales. In two or 3 years, a point of sale of 150 to two hundred million euros will be achieved with net profit margins of 15 to 20%. All this without a capital increase. Recent duplication of the percentage value is attributable to two or 3 institutional investors. Investors around the world are looking for crown recipients. Vorstandswoche’s advice is not to give any parts out of control.
It is vital to consider the source here: Vorstandwoche was the magazine that had revealed in the past the company’s medium-term sales target of 50 thousand hundred euros last year, so it seems that they have at least some communication with the company. I have some disruptions to their profitability goals, as they practically don’t involve operational leverage despite doubling sales this year (which doesn’t make sense, as we’ll see in a moment). But the main trend to which they refer, 80 mm EUR this year, one hundred mm next year and 150-200 mm in 2-3 years, is simply large and has no discount, even with the highest prices today.
More importantly, the confluence of this Article through the Disclosure of Vorstandwoche and Jackermeier, and the next bullish tone in the publication of quarterly earnings of the moment, where the company speaks of a ‘disproportionate accumulation of profitability’ in relation to the rate of profit expansion of 130%, and continues to call today. above the highest grades: proves that the visibility for the third trimester and the holiday season is already very strong. However, without putting too much weight on the year-end forecasts for 150-200 mm in a few more years, let’s take a look at what the company would look like in the next year or two. We will also have to be aware that, recent businesses have been even higher than anyone would have expected, there has been an increase in visitor dissatisfaction with service and delays that, of course, will require a high operational level of worker prices (which Jackermeier in particular mentioned), as well as software/systems to better manage the order flow, CRM, etc.