The average target price of CBRAIN.CO is 150 and suggests 30% downside potential. Usually, this means a SELL recommendation among investment firms, or a recommendation to decrease one's position in this instrument in the next 12 months. The most optimistic analyst has a target price of 150.0. This is lower than the current market price, meaning that even the most optimistic analyst does not see upside potential. On the other hand, the most pessimistic analyst has a target price of 150.0. This is equivalent to 30% downside potential in the worst case. 

cBrain A/S, a software company, develops and provides software solutions for government, private, education, and non-profit sectors in Denmark and internationally. The company offers F2 Digital Platform, an integrated software solution that combines case management, process management, and knowledge management, including full support for specialized government routines and compliance. It also provides F2 platform for automation of the public administration; and Government Climate Software. The company was founded in 2002 and is headquartered in Copenhagen, Denmark.

Denmark

cBrain A/S

Technology

The company tries to pay dividends regularly but only sometimes does so. It has paid dividends in roughly half the past ten years. Dividend per share (DPS) has grown yearly, but the dynamics are unclear. In the past 12 months, the dividend yield has barely been above zero and was substantially below that of its peers. On average, the company pays dividends annually. 

CBRAIN.CO reported revenue of DKK 268mn in the last 12 months, up 12% from FY23. At the same time, the dynamics of cash flow, as measured by free cash flow (FCF), were drastically different. EPS grew 2% from FY23 to DKK 3.30. Market expects EPS to reach DKK 3.22 in FY25.

Over the last six months, the stock performance has varied, with an increase following a drop. The stock's price trend wasn't definitive when matched against its global counterparts from the same sector and industry (as depicted above). Over the past six months the stock has exceeded the performance of this peer group by 8ppts and its growth accelerated by 1ppts in the past month. There is a distinction between the stock's performance and that of its peers from the same country and industry. Over six months it exceeded the performance of this peer group by 7ppts and accelerated its growth by 4ppts in the recent month. Given the stock's valuation versus its peers, its total price movement is mildly favourable.

The company has reported strong EBITDA margins compared to its global peers in recent years. EBITDA margin amounted to 38.8% in the last 12 months, a decline from 42.4% in FY23. 

Historically, CBRAIN.CO has reported very strong net margins compared to its global peers. Specifically, in the last 12 months, this metric equalled 24.2%, down from 26.4% in FY22. 

In the last 12 months, the return on capital employed (RoCE) declined to 20.3%, above the peers. The consensus estimate for FY24 for RoCE is 26.9%, again ahead of the peers. 

cBrain A/S reported a return on equity (RoE) of 25.0% in the last 12 months, down from 32.5% in FY23. The market consensus projects an RoE of 27.1% in FY24, again ahead of its peers. 

Another important profitability metric, return on assets (RoA), amounted to 17.7% in the last 12 months, a decrease from 19.5% in FY23. The market analysts predict that RoA will be 17.0% in FY24, again stronger than its peers. 

The ratio of return on invested capital (RoIC) to the weighted average cost of capital (WACC) has been 2.5 in the past several years. This ratio implies a strong shareholder value creation. 

The institutional, legal, and compliance risks associated with the company's country are minimal. In combination with stringent business standards, shareholder rights are very highly protected.

CBRAIN.CO has below average trading liquidity. The average private investor can sell his common position in the stock in a single trading day under normal market conditions. Liquidity is usually stable and is unfavourable on the days with the lowest activity. The trading volume mostly stays the same even under highly turbulent market conditions. The stock has a small market capitalisation, which usually makes its trading liquidity erratic and unpredictable. 

No other major risks have been identified.

The risk of default is minimal. We note robust profitability, solid return on capital, strong debt servicing capacity, adequate interest coverage, solid cash flow generation, and an favourable capital structure, among the positive credit factors. Among the negative credit factors and we point to weak positions in its industry, excessive margin volatility.

In highly turbulent market conditions, CBRAIN.CO is highly volatile. In other words, the stock will fall substantially more than the index in times of extreme market volatility or shocking company news. Standalone, the worst-day losses (less than 1% of the time) will likely be significant. 

In normal market circumstances, CBRAIN.CO is highly volatile. Put differently, without outstanding market volatility or shocking company news, the stock's price will change somewhat erratically. The stock's losses on its worst days (less than 1-5% of the time) will range from significant to substantial. 

Considering past and projected metrics, the stock is distinctly 'expensive' compared to its peers. Specifically, the stock is 'expensive' on P/E, overvalued on EV/EBITDA, overpriced on P/FCF. 

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cBrain A/S

DKK 215.5

3

cBrain A/S

DKK 215.5

3

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Profitability factor

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Risk factor

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DKK 215.5

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