Earlier this week, Netfonds confirmed its FY23 guidance of € 185-190m gross sales (+6% yoy at mid-point, vs eNuW: € 194m) and € 35-37m net sales (vs eNuW: € 37.3m) and published a blow-out mid-term guidance for FY26, which was significantly above our estimates. Here are the key takeawys:

• Net sales of € 59m (vs eNuW old: € 50m), driven by all three newly structured segments. While the investment segment as main contributor to net sales in FY26e (66%) is seen to grow 13% annually to € 39m, the insurance business is expected to show the steepest growth trajectory with 24% p.a. reaching € 16m in FY26e (27% of net sales) vs € 7.6m in FY23e. The remaining segment (Others & Real Estate) should grow at an 11% CAGR to € 4m (vs € 2.8m in FY23e).
• EBITDA to quadruple to € 23m (vs eNuW old: € 13.3m), solely due to the strong net sales forecast. Our expectations regarding the development of personnel expenses (eNuW: € 24.8m) and other operating expenses (eNuW: € 12.1m) are in line with the guidance (€ 25m and € 12m).
• EBT of € 19m (vs eNuW old: € 8.3m), assuming D&A of c. € 4m (vs eNuW: € 4.8m) and a financial result of € -0.1m (eNuW: € -0.2m).

The key growth driver is clearly the proprietary, 360° finfire platform that enables connected advisors to offer a wide range of investment, insurance, financing and banking solutions via one holistic platform to its customers. Apart from that, future growth should come from Netfonds' leading market position in an oligopolistic market with high entry barriers and long-term structural growth drivers (growing AuM´s and number of advisors, ongoing digitization of the financial sector, stricter regulation).

In order to reflect the promising guidance as well as the well-filled pipeline of customer onboardings onto the finfire platform, we sharply lift our estimates, but remain more conservative than management, expecting only € 57m in net sales and € 20m in EBITDA in FY26. Gross sales remained unchanged.

In terms of valuation, the new guidance implies an  4x EV/EBITDA multiple in FY26. Even our more conservative assumptions, translate into surprisingly low 5x EV/EBITDA FY26.

BUY with a new PT of € 70.00 (old: € 59.00), based on DCF.