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1. Company Snapshot

1.a. Company Description

Kitron ASA operates as an electronics manufacturing services company in Norway, Sweden, rest of Europe, the United States, and internationally.It manufactures electronics that are embedded in the customers' products; and box-built electronic products.The company's services include development services, such as product development, product management, re-engineering, and value analysis/value engineering; and industrialization services, including prototype manufacturing, evaluation of new products, component engineering and database, test development, design and build of high level assembly lines, and environmental durability testing.


Its services also comprise sourcing and procurement services; manufacturing, assembling, and testing of electronic products for the professional market; redesign, repair, and maintenance; logistics and distribution; and augmented reality manufacturing services.Kitron ASA was founded in 1996 and is headquartered in Billingstad, Norway.

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1.b. Last Insights on KIT

Kitron ASA's recent performance is driven by promising growth in the defence and aerospace sectors, bolstered by new contracts and facility investments. The company's Q4 2024 earnings release highlighted a profitable execution in a shifting market, with a growing order backlog of EUR 472 million. The defence and aerospace market sector is expected to continue growing, with Kitron receiving a new order for the Joint Strike Missile worth NOK 73 million. The company's restructuring efforts and improving order backlog are also contributing to its positive outlook.

1.c. Company Highlights

2. Transcript Summary

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3. NewsRoom

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3 European Stocks Estimated To Be Trading Below Intrinsic Value By Up To 47.6%

Dec -02

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Does Kitron’s 72% Share Price Surge Leave More Upside After Recent Contract Wins?

Nov -28

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Kitron ASA: New share capital registered

Nov -26

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KITRON ASA: PRIMARY INSIDER NOTIFICATION

Nov -25

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KITRON ASA: PRIVATE PLACEMENT SUCCESSFULLY PLACED

Nov -25

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Exploring Three High Growth Tech Stocks in Europe

Nov -25

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Kitron Acquires DeltaNordic, Strengthening Its Position in Defence

Nov -19

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High Growth Tech Stocks in Europe with Potential Expansion

Oct -27

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (8.15%)

6. Segments

Electrification

Expected Growth: 8.5%

Electrification growth driven by increasing demand for electric vehicles, renewable energy integration, and grid modernization. Kitron ASA's strong position in the electromechanical components market, coupled with its ability to provide customized solutions, enables the company to capitalize on this trend, resulting in an 8.5% growth rate.

Industry

Expected Growth: 9.27%

Kitron ASA's 9.27% growth is driven by increasing demand for electronics in the industrial, medical, and aerospace industries. The company's focus on high-reliability products, strategic acquisitions, and investments in technology and manufacturing capabilities have enabled it to capitalize on this trend. Additionally, Kitron's strong relationships with key customers and its ability to adapt to changing market conditions have contributed to its growth.

Connectivity

Expected Growth: 8.5%

Kitron ASA's 8.5% growth is driven by increasing demand for advanced electronics in the industrial, medical, and aerospace sectors. The company's strategic expansion into high-growth markets, such as 5G and electric vehicles, also contributes to its growth. Additionally, Kitron's focus on operational efficiency and cost reduction initiatives has improved its profitability, enabling investments in research and development to drive future growth.

Defence/Aerospace

Expected Growth: 4.65%

Kitron ASA's 4.65% growth in Defence/Aerospace is driven by increasing demand for advanced electronics in military applications, growing investments in unmanned aerial vehicles (UAVs), and rising adoption of cyber security solutions. Additionally, the company's focus on innovation, cost competitiveness, and strategic partnerships contribute to its growth momentum.

Medical Devices

Expected Growth: 8.5%

Kitron ASA's Medical Devices segment growth of 8.5% is driven by increasing demand for diagnostic and therapeutic devices, expansion into emerging markets, and strategic partnerships. Additionally, advancements in technology, such as miniaturization and digitalization, are fueling innovation and adoption. Regulatory approvals and certifications also contribute to the segment's growth.

7. Detailed Products

Electronics Manufacturing Services (EMS)

Kitron ASA provides Electronics Manufacturing Services (EMS) to original equipment manufacturers (OEMs) in various industries, including industrial, medical, and aerospace.

Industrial Electronics

Kitron ASA designs and manufactures industrial electronics, including control systems, power supplies, and communication devices.

Medical Devices

Kitron ASA develops and manufactures medical devices, including patient monitoring systems, diagnostic equipment, and medical imaging systems.

Aerospace and Defense

Kitron ASA provides electronic assemblies and systems for the aerospace and defense industries, including communication systems, navigation systems, and electronic warfare systems.

Internet of Things (IoT) Devices

Kitron ASA designs and manufactures IoT devices, including sensors, gateways, and edge computing devices.

8. Kitron ASA's Porter Forces

Forces Ranking

Threat Of Substitutes

Kitron ASA's products are specialized and customized, making it difficult for customers to find substitutes. However, the company's reliance on a few large customers increases the threat of substitutes.

Bargaining Power Of Customers

Kitron ASA's customers are large and have significant bargaining power due to their size and purchasing power. This gives them the ability to negotiate prices and terms.

Bargaining Power Of Suppliers

Kitron ASA has a diverse supplier base, which reduces the bargaining power of individual suppliers. The company's size and purchasing power also give it an advantage in negotiations.

Threat Of New Entrants

The electronics manufacturing services (EMS) industry has high barriers to entry, including significant capital requirements and the need for specialized expertise. This makes it difficult for new entrants to compete with established players like Kitron ASA.

Intensity Of Rivalry

The EMS industry is highly competitive, with many players competing for market share. However, Kitron ASA's focus on specialized and customized products helps to differentiate it from competitors and reduce the intensity of rivalry.

9. SWOT Analysis

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 45.19%
Debt Cost 8.18%
Equity Weight 54.81%
Equity Cost 8.18%
WACC 8.18%
Leverage 82.45%

11. Quality Control: Kitron ASA passed 7 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
Barco

A-Score: 5.8/10

Value: 6.7

Growth: 4.7

Quality: 6.4

Yield: 5.6

Momentum: 7.0

Volatility: 4.3

1-Year Total Return ->

Stock-Card
Vaisala

A-Score: 4.9/10

Value: 4.4

Growth: 6.1

Quality: 6.8

Yield: 3.8

Momentum: 3.0

Volatility: 5.3

1-Year Total Return ->

Stock-Card
Incap

A-Score: 4.7/10

Value: 6.8

Growth: 8.6

Quality: 7.0

Yield: 0.0

Momentum: 4.0

Volatility: 2.0

1-Year Total Return ->

Stock-Card
Kitron

A-Score: 4.6/10

Value: 6.6

Growth: 1.9

Quality: 4.1

Yield: 2.5

Momentum: 10.0

Volatility: 2.7

1-Year Total Return ->

Stock-Card
NCAB

A-Score: 3.7/10

Value: 1.1

Growth: 7.2

Quality: 5.6

Yield: 5.0

Momentum: 2.0

Volatility: 1.0

1-Year Total Return ->

Stock-Card
Strix

A-Score: 3.2/10

Value: 8.6

Growth: 2.7

Quality: 3.0

Yield: 3.1

Momentum: 0.0

Volatility: 1.7

1-Year Total Return ->

Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

62.0$

Current Price

62$

Potential

-0.00%

Expected Cash-Flows