Equity research CDON, Q2 2025: We expect a small step forward

Based on our research, we see an early indication that visits to CDON Group sites have grown somewhat sequentially in Q2, 2025, from low levels. We gauge that April was slow as expected, hampered by calendar effects. However, we estimate that traffic picked up in May. While visits in 2025 appear to have developed roughly in line with our initial expectations, the low conversion rate in Q1 was disappointing. It was the main explanation for the negative deviation from our top-line estimates. As conversion is still uncertain, we conservatively assume GMV will also decrease in Q2, translating into a contraction of net sales.

However, we expect EBITDA to turn slightly positive at SEK 2m (-9) from lower OPEX following the platform integration and personnel reduction implemented in 2024.

According to the Svensk Handel survey “E-handelsindikatorn,” Swedish e-commerce increased by 13 per cent in April. In contrast, Svensk Handel reported that the market declined by 24 per cent in May. We believe this particular survey has been volatile historically and consequently hard to interpret, possibly affected by the influence of international discount platforms. Nevertheless, the survey identifies home electronics and building products as strong segments. However, at the same time, it reports weakness in furniture, clothing, sporting and outdoor goods. If valid, these observations indicate a mixed market for CDON categories in the period.

Strategic review should put a floor on valuation

We make minor downward adjustments to our expectations ahead of the Q2 2025 report. However, as previously, we still assume a gradual improvement in the coming quarters, albeit a net sales decline for the full year 2025. Drivers for a gradual return to growth include soft comparisons, improved supply and new collaborations with enablers to improve the shopping experience.

We calculate that the share is still valued at a significant discount to relevant peers (EV/Sales NTM 1.2 vs 2.5 for the peer group). Hence, the peer group valuation has increased compared to our most recent update. For now, our base case valuation remains unchanged at SEK 92 per share.

In conjunction with the Q1 report, the CDON board stated that it had assigned an investment bank to review strategic options, “including, but not limited to; take-private transaction, capital raise to fund strategic growth opportunities, sale of the Company (whole or in part), as well as other strategic transactions.” An acquisition of CDON could be an opportunity for international marketplace or e-commerce players wishing to expand in the Nordic markets. We believe the region has the characteristics for good structural growth in e-commerce. At the same time, recent growth headwinds for CDON and the poor performance of the share may make it harder for buyers and sellers to agree on valuation until there are clear signs of a return to growth.

While there are few reported transaction values in the space, and they vary widely, we believe recent deals indicate a significant upside potential in a scenario where CDON would be acquired. Notably, marketplace companies typically enjoy higher valuations than conventional ecommerce retailers. However, assessing the likelihood of a deal actually coming to fruition is difficult.

We will review our forecasts and valuation in more detail on 15 July in conjunction with the Q2 2025 report.

Read our latest update here.

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