SSH - Expecting a solid Q4

SSH will report Q4 earnings next week on Tuesday, the 12th of February. We expect a solid Q4 result driven by patent license agreement and UKM license deal. Our focus in the Q4 report will be on strategy execution and actions to further accelerate SSH´s growth in 2019. Our HOLD rating and target price of EUR 1.80 remain intact ahead of Q4.

Expecting a solid Q4 result driven by patent and UKM deals

SSH announced in the end of last year that it had entered into a patent license agreement with a leading provider of patent risk management solutions. SSH has received a one-time payment of approximately EUR 1.75m which will be recognized in Q418. In addition, SSH previously announced a UKM license deal with a major global retail company, which is expected to contribute roughly EUR 1.5m in revenue in Q4.

Raising estimates for Q418, estimates for 2019 unchanged

We raise our Q4 estimates to take into account the EUR 1.75m patent license agreement. We now expect Q4 net sales to be EUR 7.2m (prev. 5.4m) and Q4 EBIT to be EUR 1.8m (prev. 0.3m). Our estimates for 2019 and onwards remain intact. We expect FY2018E net sales to be EUR 19.1m (vs. 16.2m 2017) and EBIT to be EUR 1.0m (vs. -1.8m 2017).

HOLD rating and target price of 1.80 euros maintained

Our focus in the Q4 call will be on strategy execution and actions to further accelerate SSH´s growth in 2019. We’re also keen on hearing an update on PrivX sales development, as SSH announced several partnerships regarding PrivX during the end of last year. We do not expect SSH to give any revenue or earnings guidance for 2019 (guidance ceased in 2017). We maintain our HOLD rating and target price of EUR 1.80 ahead of Q4.

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