June 22, 2020

#106: Jeremy Raper; Endor AG

36 minutes

For the full video interview on YouTube, click here.

If you like The Intelligent Investing Podcast, please consider subscribing on:

Apple Podcasts

Stitcher

TuneIn

Spotify

Podbean

iHeart Radio

YouTube

Overview

Endor AG is a Munich-listed holding company whose sole asset is Fanatec, the premium provider of racing wheels and other accessories for sim racing games played on consoles and PCs

Despite being a German-listed small-cap, the company has ~80% market share in the premium wheel/accessories segment and has essentially locked up exclusive branding rights for all the major OEMs and racing organizations (F1/Nascar/WRC) to produce branded replica racing wheels.

Growth

Endor AG grew 70-80% last year and has compounded revenues at 40% over the last 10yrs, as iRacing/simulated racing has grown organically in popularity at very high rates

COVID-19 Impact

Current growth is exploding due to COVID-19 and the mainstream recognition sim racing has garnered with normal sports closed for the last three months.

The current business is growing 100-200% per annum, so much so that the company can barely keep up with demand.

The company has already leaked they are targeting 150-200mm in revenues at 25-30% EBIT margins in the next couple of years (versus 40mm revenues last year and 80mm this year).

Going Forward

The stock currently trades at ~11x 2021 earnings, and ~2x 2021E sales, despite a multi-year runway where the business could grow 30% for a very long time.

Fair value on a 'normal' exchange with English disclosures/investor relations would probably be 4-5x the current price. Jeremy believes that even on the minor German exchange, it's hard to see how the stock doesn't double or triple again.

Staying In Touch With Jeremy Raper

Blog

Twitter

Staying In Touch With Eric Schleien

Facebook

YouTube

Twitter

Instagram

GSCM

...more

View all episodes

By Eric Schleien

4.7

9696 ratings

June 22, 2020

#106: Jeremy Raper; Endor AG

36 minutes

For the full video interview on YouTube, click here.

If you like The Intelligent Investing Podcast, please consider subscribing on:

Apple Podcasts

Stitcher

TuneIn

Spotify

Podbean

iHeart Radio

YouTube

Overview

Endor AG is a Munich-listed holding company whose sole asset is Fanatec, the premium provider of racing wheels and other accessories for sim racing games played on consoles and PCs

Growth

Endor AG grew 70-80% last year and has compounded revenues at 40% over the last 10yrs, as iRacing/simulated racing has grown organically in popularity at very high rates

COVID-19 Impact

Current growth is exploding due to COVID-19 and the mainstream recognition sim racing has garnered with normal sports closed for the last three months.

The current business is growing 100-200% per annum, so much so that the company can barely keep up with demand.

The company has already leaked they are targeting 150-200mm in revenues at 25-30% EBIT margins in the next couple of years (versus 40mm revenues last year and 80mm this year).

Going Forward

The stock currently trades at ~11x 2021 earnings, and ~2x 2021E sales, despite a multi-year runway where the business could grow 30% for a very long time.

Staying In Touch With Jeremy Raper