Talenom: Wrinkles in profitability
Talenom's Q1 result was a clear disappointment to the company due to weak profitability, which put our earnings estimates under pressure. Although earnings growth currently looks dismal due to heavily declining profitability it is a strategic choice by the company and profitability will eventually turn after the international growth spurt. In the longer term, the current valuation (2024e P/E 28x and EV/EBITDA 11x) is moderate but requires patience to look at the growth story beyond the profitability slump and confidence in international success.
