Nordic Entertainment Group (NENT-B.ST), mcap=$2.5bn, price SEK324 vs. SEK374

Pitch: Subscription streaming (Viaplay) and pay-TV provider in Europe. No.5 player in European SVOD, far behind $NFLX. The thesis mostly based on the continued expansion of the streaming market and Viaplay (35% of revs) being the key ’add-on’ to Netflix due to local original content and sports options. Much cheaper on a revenue basis compared to Netflix.

Valuation: Trades at 11x consensus EBITDA FY24 vs 16x for NFLX. On FY24 revenue multiples NENT is at 1.2x vs 4.3x for Netflix. Assuming a doubling of revenues in 3 years, a fourfold increase in Viaplay subscribers and 20% terminal EBITDA margin delivers DCF target of 615sek/share.

Exp. gain: 80%+

Full NENT-B.ST write-up (free guest account required):

Leave a Comment