Appear makes compact media-processing and IP-transport technology (live-video contribution/distribution, video processing, media transport over IP) for broadcasters, telcos and sports/media. FY2025 revenue grew ~32% to ~NOK 801m at a ~72% gross margin; adjusted ROIC is high but on a very small net-cash operating base (~NOK 76m IC after stripping the ~NOK 0.4bn money-market portfolio and reversing the first-year capitalised R&D), so economic profit +NOK ~76m and ROIC 'well above WACC' are structurally flattered by asset-lightness rather than incremental capital deployment.
The Q2 2026 trading update (6-9 Jul 2026) broke the growth story: Q2 revenue fell ~30% YoY to NOK 189.6m against an exceptionally strong Q2'25 (NOK 271m), H1 was down ~3% YoY, and FY2026 guidance was cut to NOK 880-920m (~10-15% growth) from ~NOK 1.0bn (~25%). Management attributes ~2/3 to large-contract timing slipping into H2 and ~1/3 to weaker commercial execution in EMEA/APAC, with the US still growing and an ~NOK 16m FX drag on EBITDAC; long-term targets (25-30% growth, ~70% GM, 17-20% EBITDAC) are reaffirmed. This is a company-specific execution stumble, not a cyclical one — the read is 'prove-it,' not 'buy the cycle.'
Net of the ~43% de-rating the setup has genuinely improved: at NOK ~42 you pay ~11-12x EV/adj-EBIT for a 70%-gross-margin, debt-free, net-cash business (net cash ~NOK 10-12/share, ~28% of the market cap) with a credible path back to double-digit-plus growth if the slipped contracts land. But the recovery is un-de-risked: the growth just cracked, management itself concedes execution weakness outside the US, and the aggressive R&D capitalisation now carries impairment risk with revenue flat. Not broken enough to sell (net-cash floor, ~2/3 timing, LT targets intact); not confirmed enough to add on the screen signal. HOLD, accumulate only on further weakness or on an H2 proof point.
At NOK ~42 the shares trade at ~11-12x EV/adj-EBIT and ~15x EV/adj-NOPAT once the ~NOK 0.4-0.5bn net cash is netted out (headline reported multiples look cheaper still — ~12x P/E, ~7x EV/EBIT — but reported EBIT is flattered by the capitalised R&D, so the adjusted lens is the honest one). Cheap for the quality IF growth resumes; fair-to-full if FY2026's ~10-15% is the new normal.
Base NOK 50 (partial H2 recovery, FY ~NOK 900m, growth resuming to mid/high-teens and EBITDAC margin recovering toward ~15% → ~13-14x EV/adj-EBIT plus net cash). Bull NOK 66 if the slipped contracts land, EMEA/APAC execution recovers and 25-30% growth + 17%+ EBITDAC margin resume (re-rate to ~16-17x). Bear NOK 31 if the stall is structural — execution weakness persists, R&D-cap impairment, margin stuck ~10-12% — with the ~NOK 10-12/share net cash cushioning the downside.
At today’s enterprise value the constant-ROIC reverse-DCF maxes out: even at its sustainable-growth ceiling (~-50.0%, limited by ROIC 108% ≈ WACC 8%) it cannot reach the current EV. No-growth value is NOK 34,489/share (82312% of price); the market prices in growth and/or a higher ROIC than booked — richly valued on this lens. Read the sensitivity grid.
| Scenario | 24m target | Impl. g | Upside | Prob. | Driver |
|---|---|---|---|---|---|
| Bull | NOK 66 | ≥-50% | +58% | 30% | Slipped H2 contracts land; EMEA/APAC execution recovers; 25-30% growth + 17%+ EBITDAC margin resume |
| Base | NOK 50 | ≥-50% | +19% | 40% | Partial H2 recovery; FY ~NOK 900m; growth resumes to mid/high-teens, EBITDAC margin recovers toward 15% |
| Bear | NOK 31 | ≥-50% | -26% | 30% | Growth stall structural; execution weakness persists; R&D-cap impairment; margin stuck ~10-12% |
| Prob-weighted | NOK 49 | — | +17% | 100% | Scenario-weighted expected value |
| WACC \ g | 0% | 3% | 5% | 8% | 10% | 15% |
|---|---|---|---|---|---|---|
| 6.50% | 47,207 | 53,849 | 58,702 | 66,667 | 72,464 | 88,818 |
| 7.25% | 39,845 | 45,329 | 49,331 | 55,893 | 60,665 | 74,111 |
| 8.00% (base) | 34,489 | 39,132 | 42,518 | 48,065 | 52,094 | 63,435 |
| 8.75% | 30,416 | 34,424 | 37,343 | 42,121 | 45,589 | 55,337 |
| 9.50% | 27,214 | 30,724 | 33,279 | 37,456 | 40,484 | 48,989 |
Green = fair value above the current price of NOK 41.90. The reverse-DCF conclusion is dominated by WACC and growth — see the whole surface, not a single fair value.
⤓ Download the full model (.xlsx) — formula-driven sheets; flex the blue input cells and the model cascades in Excel.
~2/3 of the Q2 miss is guided as timing; H2 realisation of the slipped large contracts is the swing factor and the re-rate catalyst.
The Americas kept growing through Q2; the offshore weakness is EMEA/APAC-specific, not company-wide.
~70% gross margin, net cash, adjusted ROIC well above WACC — capital-light growth funded internally.
~NOK 0.4-0.5bn (~28% of cap) available for accretive M&A, buybacks or reinvestment as growth normalises.
Appear's growth thesis cracked in Q2 2026 (revenue -30% YoY, FY guidance cut ~10%), and the ~43% de-rating to NOK ~42 has restored a real margin of safety that was absent at NOK 73 — but the re-rate is catalyst-dependent and should not be bought on the screen's #1 rank, which is running on stale pre-Q2 LTM data. HOLD; base NOK 50.
The name is not broken (net-cash floor ~28% of cap, ~2/3 of the miss guided as H2 timing, ~70% GM and LT targets reaffirmed), so keep the position; but wait for the H2 catalyst — evidence that the slipped contracts land and EMEA/APAC execution recovers — before adding, or accumulate only on further weakness toward the net-cash-supported bear.
Every adjustment traces to the cited note/page in the source filing — click to open it there. Annual report / 10-K: 📄 open · Latest interim: 📄 open
| Adjustment / figure | Value | Source | Why mttssn treats it this way |
|---|---|---|---|
| Revenue LTM Q1 2026 | 870,114 | Condensed IS, LTM column 📄 p.15 | LTM = FY2025 800,943 − Q1 2025 162,505 + Q1 2026 231,677; company pre-computes the LTM column. |
| Operating profit reported LTM | 172,337 | Condensed IS, LTM column 📄 p.15 | Reported EBIT before mttssn adjustments; flattered by first-year dev capitalisation. |
| Development expenses capitalised LTM | 65,854 | EBITDAC APM / Note 4 📄 p.25 | Spend routed to intangibles instead of P&L; mttssn expenses it in-period (core software edge). |
| Capitalised dev additions FY2025 | 66,237 | Note 10 Intangible assets 📄 p.67 | First year of capitalisation (NBV 65,259k); 58,471k was employee-benefit expense removed from opex. |
| Amortisation of capitalised dev | 1,500 | Note 5.1 / Note 10 📄 p.60 | Amortisation only began H2 2025 (FY charge 977k on cap-dev); LTM ~1,500k estimate — small, ramping. |
| Total equity | 617,741 | Condensed BS 31 Mar 2026 📄 p.17 | IC anchor equity; no NCI. |
| Money-market fund portfolio (FVTPL) | 413,455 | Condensed BS / Note 5 📄 p.16 | Non-operating liquidity (IPO proceeds); stripped from IC as excess cash. |
| Cash and equivalents | 62,157 | Condensed BS / Note 6 📄 p.16 | Only 2% of revenue treated as operating; remainder excess. |
| Lease liabilities (total) | 69,391 | Condensed BS (59,707 + 9,684) 📄 p.17 | Office leases only — peripheral, excluded from IC; IFRS 16 interest already below EBIT. |
| Share-based payment charge Q1 2026 | 2,998 | Note 7 Significant events 📄 p.22 | First LTI awards eff. 1 Jan 2026; kept in opex (not added back). |
| Effective tax rate | 0.238 | Note 7.1 📄 p.62 | Company effective rate 23.8% (Norway statutory 22% + permanent differences). |
| Company EBITDAC LTM | 128,357 | EBITDAC APM 📄 p.25 | Company's own cash-basis measure; basis for APM bridge (less D&A). |
How the mttssn view has evolved — each prior dated note is preserved.