ARPA Expansion And Cost Transformation Are Set To Drive Stronger Long Term Earnings

Catalysts

About Vend Marketplaces

Vend operates digital marketplaces across Mobility, Real Estate, Jobs and Recommerce, connecting buyers and sellers through classifieds and transactional models.

What are the underlying business or industry changes driving this perspective?

• Rollout of structured dealer packages and harmonized pricing across Nordic Mobility markets, supported by the Aurora platform launch and value-added tools such as integrated car valuation, is expected to support double-digit ARPA growth in autos and lift segment revenue and EBITDA margins over time.
• Upgraded Real Estate packages, including exclusive lead-generation tools such as the home valuation service for large agents, are deepening agent dependence on Vend’s ecosystem and are already associated with high-teens ARPA growth, which may compound topline performance and support continued margin expansion.
• Scaling high-margin transactional models in Real Estate rentals and Recommerce, supported by growing GMV and improving take rates, is gradually shifting the mix toward more recurring, volume-resilient revenues and higher gross margins, which may improve earnings visibility.
• Ongoing cost transformation, including FTE reductions, platform consolidation and the wind-down of low-margin TSA and noncore activities, is structurally lowering the OpEx-to-revenue ratio and creating operating leverage that may support net margin and EPS growth if revenues re-accelerate.
• Disciplined portfolio simplification and capital allocation, including divestments, debt kept near zero and sizeable buybacks, is concentrating resources on core marketplaces and increasing per-share exposure to ARPA-led growth, which may support earnings per share and return on equity.

Assumptions

How have these above catalysts been quantified?

• Analysts are assuming Vend Marketplaces's revenue will decrease by 3.3% annually over the next 3 years.
• Analysts assume that profit margins will increase from 18.0% today to 24.6% in 3 years time.
• Analysts expect earnings to reach NOK 1.8 billion (and earnings per share of NOK 8.33) by about January 2029, up from NOK 1.5 billion today. However, there is a considerable amount of disagreement amongst the analysts with the most bullish expecting NOK2.3 billion in earnings, and the most bearish expecting NOK1.5 billion.
• In order for the above numbers to justify the price target of the analysts, the company would need to trade at a PE ratio of 39.4x on those 2029 earnings, down from 40.7x today. This future PE is lower than the current PE for the GB Interactive Media and Services industry at 40.7x.
• Analysts expect the number of shares outstanding to decline by 7.0% per year for the next 3 years.
• To value all of this in today's terms, we will use a discount rate of 7.62%, as per the Simply Wall St company report.

Risks

What could happen that would invalidate this narrative?

• Structural volume pressure across key verticals such as Mobility sub categories, Real Estate and Jobs, driven by weaker macro conditions and structurally lower listing activity, could limit the ability of ARPA initiatives to offset declines and weigh on long-term revenue growth and operating leverage, ultimately constraining earnings.
• Execution risk around portfolio simplification and the full phaseout of TSA revenues with Schibsted Media, including the indicated temporary EBITDA headwind of up to NOK 100 million in 2026 and ongoing HQ deficits, may prove larger or more persistent than planned and delay margin expansion and net income growth.
• Rising competitive and technological disruption risks from GenAI and new search or agentic models could weaken network effects, divert traffic away from Vend’s marketplaces and force higher ongoing tech and marketing spend, pressuring both topline growth and net margins.
• Persistent losses and ongoing investment needs in Recommerce, despite improving transactional metrics, could either delay any path to scale profitability or require a strategic reset, weighing on group EBITDA margin and diluting earnings growth potential.

Valuation

How have all the factors above been brought together to estimate a fair value?

• The analysts have a consensus price target of NOK340.44 for Vend Marketplaces based on their expectations of its future earnings growth, profit margins and other risk factors.
  
• However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of NOK410.0, and the most bearish reporting a price target of just NOK268.0.
  
• In order for you to agree with the analysts, you'd need to believe that by 2029, revenues will be NOK7.5 billion, earnings will come to NOK1.8 billion, and it would be trading on a PE ratio of 39.4x, assuming you use a discount rate of 7.6%.
  
• Given the current share price of NOK280.6, the analyst price target of NOK340.44 is 17.6% higher.
  
• We always encourage you to reach your own conclusions though. So sense check these analyst numbers against your own assumptions and expectations based on your understanding of the business and what you believe is probable.