CRAD-B.ST — mttssn research

HOLD

Conviction: MEDIUM

A high-quality niche radiation-therapy QA medtech (17% ROIC) with a growing recurring-software base, but small absolute economic profit and a price embedding ~5.6% perpetual growth leave it fully valued. Quality micro-cap, full. HOLD.

Adj. ROIC

16.7%

WACC 8% → spread +8.7pp

Economic Profit

+SEK 19M

+SEK 19M; small but high-ROIC

FCF Yield

-0.5%

Slightly negative LTM — watch

Price / Target

SEK 34 → SEK 34

-1% base; HOLD

Revenue (LTM)

SEK 428M

LTM; radiation-therapy QA

EBIT Margin

11.0%

GAAP; software mix rising

EV / IC

4.65×

Enterprise value / invested capital

Net Debt

net cash SEK 126M

Low

Thesis

C-RAD is a Swedish medtech specialising in patient positioning and quality-assurance systems for radiation therapy (cancer treatment), with a growing high-margin software/recurring-revenue base attached to an installed hardware fleet. Adjusted ROIC of 17% reflects a capital-light niche franchise.

Economic profit is small in absolute terms (+SEK 19M) on a tiny capital base, and the equity at SEK 34 embeds ~5.6% perpetual growth (reverse-DCF). Quality and growth are real, but the valuation is full for a micro-cap exposed to hospital capex cycles.

Valuation · reverse-DCF & scenarios

Bridging adjusted NOPAT through net debt, reverse-DCF fair value runs SEK 20–25 across growth scenarios — below the SEK 34 price (~5.6% implied growth). Full for a micro-cap, with recurring software the quality support.

Base SEK 34 (flat); bull SEK 44 (installed-base growth + recurring-software mix lifts margins); bear SEK 26 (hospital-capex softness or order lumpiness).

Market-implied growth

≥15.9%

model ceiling — EV implies more than constant-ROIC sustains

No-growth value / share

SEK 20

58% of price; rest = priced-in growth

ROIC − WACC

+8.7 pp

ROIC 16.7% vs WACC 8.0% — positive = value creation

CAP (priced-in)

10.6 yrs

years of excess returns the price implies (fades to WACC)

At today’s enterprise value the constant-ROIC reverse-DCF maxes out: even at its sustainable-growth ceiling (~15.9%, limited by ROIC 17% ≈ WACC 8%) it cannot reach the current EV. No-growth value is SEK 20/share (58% 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	SEK 44	≥16%	+28%	30%	Installed-base + recurring-software mix lifts margins
Base	SEK 34	≥16%	-1%	45%	Full: ~5.6% implied growth
Bear	SEK 26	+11%	-24%	25%	Hospital-capex softness / order lumpiness
Prob-weighted	SEK 35	—	+2%	100%	Scenario-weighted expected value

Sensitivity — fair value / share at WACC × growth

WACC \ g	0%	3%	5%	8%	10%	15%
6.50%	26	28	30	32	34	40
7.25%	22	24	25	27	29	33
8.00% (base)	20	21	22	24	25	28
8.75%	18	19	20	21	22	25
9.50%	17	18	18	19	20	22

Green = fair value above the current price of SEK 34.30. The reverse-DCF conclusion is dominated by WACC and growth — see the whole surface, not a single fair value.

Method & data. NOPAT SEK 37, invested capital and ROIC 16.7% are observed (adjustments.json); WACC 8.0% and terminal g 2.5% are assumptions. EV→equity uses net debt SEK -126. The model holds ROIC constant (no fade) over the explicit horizon; the CAP figure instead fades excess returns to WACC.

⤓ Download the full model (.xlsx) — formula-driven sheets; flex the blue input cells and the model cascades in Excel.

Key drivers

1. Niche QA leadership

A specialised radiation-therapy QA position with clinical stickiness.

2. Recurring software

A growing software/service base adds high-margin recurring revenue.

3. 17% ROIC

Capital-light, high-return economics.

4. Cancer-care demand

Structural growth in radiation-therapy treatments underpins demand.

5. Installed-base leverage

Aftermarket/software upsell on a growing installed fleet.

Key risks

Micro-cap/liquidityA small, illiquid stock sensitive to a few large orders.
Hospital capex cyclesRadiation-equipment demand tracks hospital capital budgets.
Order lumpinessQuarterly results can be uneven on project timing.
Full valuationPrice embeds ~5.6% perpetual growth.
CompetitionLarger medtech competitors in radiation-therapy QA.

Conclusion

C-RAD is a high-quality niche radiation-therapy QA franchise at a full price. HOLD, medium conviction; base target SEK 34 (flat) — accumulate on hospital-capex weakness.

Installed-base and recurring-software growth are the upside; capex cyclicality and micro-cap liquidity are the principal risks.