Norse Atlantic ASA provides long-haul airline services. It focuses on serving various destinations between Europe and the United States, including New York, Florida, Paris, London, and Oslo. The company was founded in 2021 and is headquartered in Arendal, Norway.

Norway

Norse Atlantic ASA

Industrials

The company does not pay dividends at all, or it pays them sporadically. There have only been a few years with dividend payments in the past ten years. 

The stock's performance has been mixed in the past six months, with growth following a decline. There is no clear price trend compared to its global peers from the same sector and industry (as shown above). The stock has outperformed this peer group by 189ppts over past six months and grown 0ppts faster in the past month. This is largely true for peers from the same country and sector. With respect to the stock's valuation against its peers, its overall price performance is 'fair'.

The company has reported very poor EBITDA margins compared to its global peers in recent years. EBITDA margin amounted to -1.4% in the last 12 months, up from -11.6% in FY23. 

Historically, NORSE.OL has reported very poor net margins compared to its global peers. Specifically, in the last 12 months, this metric equalled -23.0%, a growth from -38.4% in FY23. 

In the last 12 months, the return on capital employed (RoCE) grew to -17.1%, below the peers. The consensus estimate for FY24 for RoCE is 10.0%, again behind the peers. 

Another important profitability metric, return on assets (RoA), amounted to -12.8% in the last 12 months, an increase from -15.5% in FY23. The market analysts predict that RoA will be 10.0% in FY24, more robust than its peers in this period. 

Norse Atlantic ASA reported a return on equity (RoE) of 90.2% in the last 12 months, down from 426.3% in FY23. The market consensus projects an RoE of -120.9% in FY24, however, this time below its peers. 

The ratio of return on invested capital (RoIC) to the weighted average cost of capital (WACC) has been -5.8 in the past several years. This ratio implies a fragile 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.

NORSE.OL has very poor trading liquidity. It will take at least a day or two for the average private investor to sell a common position under normal market conditions. Liquidity may be unstable and is average on the days with the lowest activity. The trading volume mostly stays the same even under highly turbulent market conditions. The stock has a tiny market capitalisation, which usually makes its trading liquidity erratic and unpredictable. 

No other major risks have been identified.

The risk of default is high. Among the negative credit factors, we point to bleak profitability, negligible return on capital, poor working capital management, inadequate interest coverage, poor cash flow generation, and an unfavourable capital structure. We note resilient historical revenue growth and low margin volatility, among the positive credit factors. 

In highly turbulent market conditions, NORSE.OL is exceptionally volatile. In other words, the stock will be among the worst-performers in times of extreme market volatility or shocking company news. Standalone, the worst-day losses (less than 1% of the time) will likely be critical. 

In normal market circumstances, NORSE.OL is exceptionally volatile. Put differently, without outstanding market volatility or shocking company news, the stock's price will change quite unpredictably. The stock's losses on its worst days (less than 1-5% of the time) will range from critical to immense. 

Based on key historical and expected multiples, the stock is greatly undervalued relative to its peers. Specifically, the stock is 'cheap' on P/E, overvalued on EV/EBITDA, underpriced on P/FCF. 

Norse Atlantic ASA

NOK 4.78

3

Norse Atlantic ASA

NOK 4.78

3

Risk factor

Profitability factor

Risk / Profitability

Risk factor

Profitability factor

NOK 4.78

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