Atea ASA (ATAZF, Financial) has been downgraded from "Overweight" to "Neutral" by Cantor Fitzgerald's analyst, Vinay Bhardwaj. The decision comes with a price target set at NOK 137. This adjustment reflects the firm's concerns about potential reductions in IT expenditure, which could impact the company's performance.
The analyst indicated that market expectations for Atea's financial performance in fiscal 2025 might be overly optimistic, given the anticipated slowdown in IT spending. This sentiment suggests a cautious approach toward the stock amidst evolving market conditions.
ATAZF Key Business Developments
Release Date: February 06, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Atea ASA (ATAZF, Financial) reported a strong sales growth of 15% in Q4 2024, with revenue reaching NOK 16.5 billion.
- Hardware sales increased significantly by 18.8%, and software sales grew by 16.0% from the previous year.
- The company experienced a substantial cash flow from operations, amounting to NOK 2.2 billion, driven by higher cash earnings and reduced working capital.
- Atea ASA (ATAZF) maintained a positive net cash balance of NOK 1.4 billion at year-end, indicating strong financial health.
- The company is well-positioned for future growth, with expectations of high single-digit growth in 2025 and 2026, supported by key growth drivers such as AI, defense, and infrastructure upgrades.
Negative Points
- Gross margin fell in Q4 due to a shift in customer mix and increased price competition.
- Personnel costs and other operating expenses grew by 1.6%, although they were flat when adjusted for currency movements.
- Atea ASA (ATAZF) incurred a one-time restructuring cost of NOK 39 million in Sweden, resulting in a workforce reduction of 75 employees.
- Sales in Finland and the Baltics declined by 2.9% and 7% respectively, reflecting economic challenges in these regions.
- The company's EBIT fell in Sweden and Denmark by 9.6% and 17.4% respectively, due to intense market competition and changes in sales composition.
