Prime Transaction estimates an intrinsic value of 15.5521 lei for the 2B Intelligent Soft share

The analysis team of the Prime Transaction brokerage house estimates an intrinsic value of 15.5521 lei for the 2B Intelligent Soft (BENTO) share, 15% above yesterday's quote from the trading session of 13.5 lei, as it turns out from a report published on the BVB Research Hub portal, signed by Marius Pandele.

Last week, the company specialized in the development and implementation of software solutions and the provision of IT and Cloud infrastructure services, reported revenues of 24.2 million lei, for the first three months of the year, more than five times higher compared to those in the same interval from 2023 and a net profit of 6.8 million lei, more than eight times higher than the result from the January-March interval of last year, of 0.83 million lei. The net profit related to the last twelve months increased to almost 19 million lei, compared to 13 million lei in 2023, and the net margin rose to 25.2%, from 22.4% last year.

According to Prime, the main reason for such strong growth in Bento's revenue and profitability is the contracts signed by the company in the second half of 2023 and implemented earlier this year. "The financial results of the first quarter brought improvements for the company's most important indicators. Return on equity, one of the most important metrics from a shareholder's perspective, was driven up by both higher operating efficiency and net profit margin growth," Prime's report said.

According to the document, the return on equity as of the end of the first quarter of the year, taking into account the data of the last twelve months (ROE Q1 2024 - TTM), reached 63.9%, compared to 43.7% in 2023 and 33.8% in 2022, being, moreover, at a maximum of the 2019-2024 period.

To value the 2B Intelligent Soft stock, the Prime Transaction team uses a combination of the market multiples method and the future cash flow method. Through the method of comparing multiples, analysts obtained a value of 14.9992 lei, while through the method of discounting cash flows, in the plausible scenario, analysts estimated an intrinsic value of 16.105 lei/share. Thus, an average value of 15.5521 lei is reached.

"Bento's business model makes the estimates have a greater margin of error than other issuers, the results being dependent on the contracts that the company manages to obtain. Any additional contract can add millions or even tens of millions of lei to the value of the company, the same thing can also happen in the opposite direction, when an important contract carried out in previous years is not replaced with new ones", it is mentioned in document.