After two years of delivering significant EBIT growth, we expect Multitude to continue on its growth path and remain on track to meet the new guidance for FY26 of € 30m net income. Here is why:

Demand for loans to remain undebatable high. According to a survey of EY, consumer loans and corporate loans in the Eurozone grew by 1.6% and 5.5% in FY23 and are expected to grow by 1.9% and 2.7% in FY24. We expect numbers to be even higher in Multitude´s niche within these verticals (near prime consumer loans (ferratum) and SME loans (CapitalBox)). Consequently, Multitude´s net loan book (NAR) should continue to grow to € 605m in FY24 (eNuW).

Risks are well under control: Being very restrictive and selective, Multitude is granting only 10% of loan applications. That paired with the strategic shift towards premium loans has reduced impaired loan coverage ratio to <18% from >30% a few years ago. We expect this trend to continue in FY24 (eNuW: <17%).

Margins to remain stable in relation to interest costs. With an improving quality of the loan book, the margins naturally decline. Still, Multitude should remain capable to pass on increasing interest costs.

New net income guidance for 2026.

After having reached its EBIT guidance in 2022 and (most likely) its 2023 EBIT guidance (eNuW: € 45m; 19 % margin; € 0.65 EPS),

. Further, management recently introduced a

(vs eNuW: € 31m), implying a 26% CAGR that should be realized mainly due to

while being very restrictive and selective on the risk side,

by steadily increasing efficiency and automate processes and

that should kick in.

Considering the sound performance and the bright outlook, the stock looks heavily mispriced, trading at negative EV and a 3.3x PE´24e, making the growing, highly profitable, resilient and dividend paying company looking dirt cheap.

We hence keep Multitude in our NuWays Alpha List and reiterate BUY with an unchanged € 10 PT, based on our residual income model.