Fortnox: Major transformation emerging – towards a complete financial platform for Swedish SMEs

Following recent extensive meetings with company management and a review of the case, we are substantially upgrading our valuation range – our base case is now SEK 200 (105). We previously failed to grasp the massive change process the company has embarked upon, which targets a transformation from an accounting software company into a long-term set-up that may well more resemble that of a commercial bank (accounting software being a small part rather than the whole). Without fully factoring in such paradigm shift, our new assumptions suggest sales CAGR of 17% for the period 2020-2030 with average EBIT margin of 35%. The upside is huge, however, should the strategic transformation materialize and be successful.

We think it will.