Share analysis

1 Brief overview

2 Introduction

3 Business segments

4 Business figures

5 Latest quarterly figures

6 Holding structure

7 Valuation

8 Conclusion

9 Announcement

10 Sources

Brief overview

Market capitalization: 2.29 billion zloty

KGV/KGVE: 25/19

Annualized yield: 45.67 % p.a.

Analyst rating: Buy

Introduction

cyber_Folks $CBF (+1,38 %) is a Polish technology company specializing in the hosting of websites and the registration and trading of domains. cyber_Folks was founded in 1999 by Jakub Dwernicki. Through major investments in Vercom $VRC (+0,35 %) and Shoper, cyber_Folks is also developing a large ecosystem for many different sectors. The investment in Shoper $SHO (+1,72 %) is not yet included in most business figures because it was only announced at the end of November 2024.

Business areas

https://investors.cyberfolks.pl/

cyber_Folks generates the majority of its revenue from its hosting business. In the 2024 financial year, the company had around 220,000 customers (2023: 220,000 customers). According to the company, the focus is on e-commerce customers.

The most important market is Poland, but the company has also achieved a strong market position in Croatia and Romania. Strategically, the company would like to expand further into more Eastern European countries (Czech Republic, Hungary, Austria, etc.) in order to enable sustainable growth in the future.

The average revenue per customer (ARPU) in the last 12 months is currently 477 zlotys. A year ago it was 350 zlotys. The trend is therefore pointing upwards.

In the domain business, the ARPU is only 89 zlotys. A positive trend can also be seen here. Compared to the previous year, however, the number of domains shrank by 7% to 365,000.

VAS also includes other, relatively irrelevant additional services such as tools for SEO measures, but these are of secondary importance for this analysis.

Business figures (without Shoper)

https://www.google.com/finance/quote/CBF:WSE?hl=de

Over the last 20 years, turnover has grown by an impressive average of 40% per year (including Vercom). In the past financial year, turnover amounted to 657 million zloty, of which cyber_Folks itself accounted for only 160 million (24%). The remaining turnover comes solely from the investment in Vercom.

However, the company's own business is twice as profitable as Vercom with an adjusted EBITDA margin of 44.7%. Revenue increased by 14%, an acceleration of 1 percentage point compared to 2023.

https://investors.cyberfolks.pl/

Despite many acquisitions, cyber_Folks' debt is limited. The ratio of net debt to adjusted EBITDA is a healthy 2.1. Last year, 28 million zlotys were also distributed to shareholders in the form of share buybacks and dividend payments. The dividend yield is 1.2% and the payout ratio is around 40% of EBIT.

Latest business figures

Revenue increased by 32% to PLN 191 million in the first quarter of 2025, including Vercom and Shoper. Adjusted EBITDA grew disproportionately by 55% to 62 million zlotys (margin: 32%).

The turnover of only cyber_Folks increased constantly by 14%. The adjusted EBITDA margin rose to 49%. Unfortunately, actual profit figures are not published for the first quarter.

Holding structure

https://investors.cyberfolks.pl/

Jacek Duch: Chairman of the Supervisory Board of cyber_Folks

Jakub Dwernicki: Founder and CEO

Robert Dwernicki: no specific information found

TFI Allianz Polska: investment fund company

Vienna PTE: pension fund manager

PTE Allianz Polska: participation by Polish pension funds

Disclaimer

This is not investment advice. These are personal assessments that cannot replace professional advice. You can find the detailed and complete stock analysis on my free substack (link in profile).

Rating

Due to the new investment in Shoper and the focus on strategic acquisitions, a DCF model is unfortunately only of limited value. The P/E ratio currently stands at 25, the P/E ratio at 19 and the P/B ratio at 3.3, which is roughly in line with the historical average. A comparison with Vercom shows that Vercom alone looks interestingly more expensive with a P/E ratio of 26 and a P/B ratio of 5.25. A comparison with Shoper paints a similar picture.

Conclusion

For me, the corporate network of cyber_Folks and Vercom remains opaque.

However, Vercom is certainly the most relevant for cyber_Folks' share price. It is therefore not clear to me why an investment in Vercom should not be considered directly instead of indirectly via cyber_Folks.

Incidentally, I published a recommendable analysis of Vercom two weeks ago.

As an international investor, it is unfortunately difficult to understand and actively follow unknown stocks like cyber_Folks anyway. There is also the language barrier. Although some of the annual reports are in English, earnings calls and general meetings are primarily in Polish.

Announcement

In order to maintain the quality of my stock analyses, I will be abandoning my original goal of publishing a post every week after more than two months. In the coming months in particular, I have planned analyses of exciting companies for which I need more time for research. For the time being, I will therefore publish an article every two weeks.

Source

https://investors.cyberfolks.pl/

Structure

Brief overview

Introduction

Business Divisions

Business figures

Latest quarterly figures

Holding structure

Valuation

Conclusion

Sources

Brief overview

Market capitalization: 2.68 billion złoty

KGV/KGVE: 34/28

Annualized yield: 22.74% p.a.

Analyst rating: Buy

Introduction

Vercom $VRC (+0,35 %) is a Polish company specializing in communication platforms (CPaaS). Companies use Vercom's solutions to get in touch with their customers. Specifically, communication between companies and customers is automated and made scalable. The whole thing works via the usual communication channels (email, SMS, push notifications).

Vercom was founded in 2005 by Jakub DwernickiAdam Lewkowicz and Krzysztof Szyszka. While Jakub Dwernicki moved to cyber_Folks and Shoper, Krzysztof Szyszka became CEO and Adam Lewkowicz CTO.

In 2020, the company finally achieved a leading market position in Eastern Europe. One year later, the successful IPO on the Warsaw Stock Exchange took place and another year later the company entered the international market. The expansion was primarily driven by the acquisition of MailerLite for around 340 million złoty. MailerLite offers customized newsletter design and the targeted, automated sending of emails.

Vercom's well-known customers include Ikea, Coca-Cola, American Express, DHL and Rossmann. However, the majority of sales still come from Poland.

Vercom employs around 400 people at 30 locations worldwide.

Business areas

Vercom is divided into many smaller companies. These include the aforementioned MailerLite, but also MailerSend, Mailercheck, PushPushGo, Oxylion, ProfiSMS and Leadstream. The company structure is therefore unfortunately opaque.

It is therefore all the better that the management is striving to merge all these services into the MessageFlow platform. MessageFlow will be available on the Azure marketplace from the 1st quarter. Azure offers access to over 130,000 potential customers. It was also announced that MailerLite will be available in the Google Cloud.

This fits in with the strategy of globalizing the customer base. This is expected to lead to further growth. According to Juniper Research (market research company), the total addressable market will increase 14-fold from USD 600 million to USD 8.2 billion.

Vercom is characterized in particular by a competitive price structure and is thus positioned much more favorably than competitors such as Klaviyo. Entry-level tariffs start at just EUR 10 per month, while Klaviyo only offers its cheapest option from EUR 20.

Business figures

Turnover rose by 47% to 469 million złoty (112 million euros) in the last financial year. It was not only in the recent past that sales growth was in the high double-digit range. The average sales growth from 2018-2024 was 42.5% and from 2021-2024 40%.

In 2024, net profit grew at the same rate to złoty 77 million (margin: 15%) and adjusted EBITDA to złoty 110 million (margin: 22%).

The balance sheet is robust. Non-current loan liabilities of złoty 67 million are offset by cash and cash equivalents of złoty 112 million.

The eightfold increase in the number of customers to 94,700 is also definitely worth mentioning. However, EBITDA only quadrupled in the same period. So you earn less from one customer. This is due to the fact that many new customers tend to belong to the SME sector and are not major customers with large budgets.

The explosive increase in the number of customers from 2021 to 2022 can be explained by acquisitions (e.g. MailerLite).

The majority of customers probably still come from Eastern Europe, but the American exposure seems to be gaining relevance. The latest data is from 2023. Compared to 2022, the share of America increased by 3 percentage points to 37%.

For the current financial year, management expects EBITDA growth of around 23%. In the medium term, however, the aim is to triple EBITDA by 2028, driven by organic growth and acquisitions. A budget of one billion złoty (235 million euros) has been earmarked for acquisitions.

Last quarterly figures

In the first quarter, the number of customers rose by 15 % to 98,000, which is a significant slowdown compared to last year (customer growth 24Q1: 24 %). At 6 %, sales growth was also only in the high single-digit range. Nevertheless, adjusted EBITDA rose by 23 % and net profit by 38 %. The reasons for this are increasing efficiency and falling administrative costs.

Encouragingly, a share buyback program with a volume of 30 million złoty was approved at the last Annual General Meeting. The dividend increases by 27% to 2.03 złoty per share. The current dividend yield is 1.7%.

Furthermore, it was decided to integrate MailerLite and MessageFlow into Shoper as a standard provider of communication tools for Shoper customers, which will certainly have a positive impact on sales figures for the coming quarters.

Holding structure

cyber_Folks: Polish technology company; complete takeover probably not planned for the time being

Adam Lewokwicz: founder and CTO

PTE Allianz Polska: participation by Polish pension funds

NN Group: manages pension funds

Valuation

With an expected P/E ratio of 28 and a P/B ratio of 5.24, the valuation is roughly in line with the historical average. The valuation ratios must be set in relation to the expected sales growth, which is expected to be around 16% p.a. over the next few years. Vercom therefore initially seems slightly overvalued to me.

However, as a DCF model is more meaningful, we are now making further estimates:

• For the pessimistic scenario, we assume a perpetual growth rate of 2.7 % p.a. and use the average FCF margin of 19 %.

• For the medium scenario, we assume a growth rate of 3% p.a. and an FCF margin of 20%.

• For the optimistic scenario, a growth rate of 3.3% p.a. and an FCF margin of 23%.

We also add a margin of safety of 25% to all values.

Conclusion

Vercom is definitely an interesting company. The sector and the strong Polish economy will ensure future sales growth.

The lack of transparency with regard to revenue distribution by region and other important missing data speak against an investment. In addition, all quarterly reports and earnings calls are only available in Polish.

In my opinion, there is no reason to invest. Personally, I am leaving Vercom on the watch list for the time being.

Sources

https://vercom.pl/en/financial-reports/

German shareholders and Poles

Polish companies and shares are rarely discussed in German-speaking countries. The best known are probably Dino Polska
$DNP (-0,42 %) and Zabka $ZAB (+2,93 %) which are both active in the food retail sector. In the small-cap investment community Text S.A. $LVC (-3,57 %) is also known to some. Recently @Daxhund also published a recommendable post about the waste company Mo-BRUK $MBR (-2,28 %) was also published. However, today's post is not about these four shares. This post is the beginning of a kind of series on Polish growth stocks. However, this first post contains some basic information about the Polish economy and a brief introduction to the stocks as a foretaste of what to expect in the coming weeks.

Poland as a business location

The most populous country in Eastern Europe is developing into a very attractive location for companies. This is particularly evident in the rapid development of gross domestic product to date: since 1980, the figure has risen by an average of 7% per year [1]. According to estimates, growth is only expected to slow by two percentage points to 5% per year by 2030. As in Germany, a large part of value creation is generated by the service sector. Industry and agriculture together only contribute around 1/3 to GDP [2]. With an unemployment rate of 2.7 % (Germany: 3.5 %), it also has the lowest unemployment rate in the EU after the Czech Republic [3]. Incidentally, the national currency is the złoty. One złoty is equivalent to around 0.27 US dollars [4]. The currency has recently appreciated slightly, but interest rate cuts are foreseeable in Poland in the coming months [5].

The economic success is also reflected in the share prices of Polish stocks. The best-known index is the WIG20TR performance index. This tracks the 20 largest and most liquid companies listed on the Warsaw Stock Exchange. With an annualized return of around 12 % over the last five years, it is roughly on a par with the German DAX index and the famous S&P 500.

google.com/finance/

It is worth taking a look at the Polish indices that track medium-sized companies. A comparison of the various indices reveals a clear pattern. The smaller the companies covered by the respective index, the higher the return to date. The smallest index, WIG80TR, comprises 80 small Polish companies and has achieved an impressive return of over 20 % per year. This is even better than tech indices such as the Nasdaq 100 (14.5 % p.a.).

google.com/finance/

Disclaimer

This is not investment advice. These are personal assessments and cannot replace professional advice. If you don't want to miss any more stock analyses from me, please subscribe to my free sub-subscription (link in profile).

However, it is difficult to invest in the Polish market via ETFs. However, if you are firmly convinced of Poland, you can take a look at the iShares MSCI Poland UCITS ETF USD (Acc). According to its own statements, the ETF promises "access to the highest-volume companies on the Polish stock market". It contains 13 different stocks. However, the largest position (PKO Bank Polski) is quite overweight with a share of 20% of the total position. The TER of the ETF is also quite high at 0.74% p.a. The past performance correlates strongly with the WIG20TR.

The three stocks

Vercom

With a market capitalization of the equivalent of 600 million euros, Vercom $VRC (+0,35 %) is the most valuable of the three companies. Founded in 2005, the company offers cloud communication platforms (CPaaS) for companies to optimize their relationship with customers. Among its many products is the Emaillabs platform, for example, which can be used to reliably send notifications, password resets, purchase receipts and offers to customers. Turnover rose by 47% to 469 million złoty (112 million euros) in the last financial year. However, the share has its price: according to my own estimates, the P/E ratio is 27. It remains to be seen whether this valuation is justified.

cyber_Folks

cyber_Folks $CBF (+1,38 %) is a Polish technology company. It specializes in web hosting and the registration and transfer of domains. It's like the Polish Ionos, but without its own cloud. With a steadily growing customer base of 370,000 and impressive average revenue growth of 40% since 2005, there is little to complain about in terms of figures. Half of the turnover comes from Poland, the other half is international sales. The company also holds large stakes in the other two shares. It holds 50 % of the shares in Vercom and 49.9 % in the other. The complete takeover of both companies is not planned for the time being, but rather a kind of cooperation in which the various products are implemented across all three companies because they complement each other so well. This will create an ecosystem that can be expanded through possible further acquisitions.

Shoper

Shoper $SHO (+1,72 %) offers a platform based partly on a subscription model. With Shoper, companies can create their own online store. There is also the additional option of launching and managing advertising campaigns. In other words, a Polish equivalent to Shopify. In 2024, turnover increased by 26% to 192 million złoty. The net margin improved from 17% to 19%. The share price is currently 29 times the expected profit for this year. For Shopify it is 80 times. This raises the question of whether this valuation discount is justified and whether Shoper can continue to hold its own in the future.

Sources

[1]

https://de.statista.com/statistik/daten/studie/14410/umfrage/bruttoinlandsprodukt-bip-in-polen/

[2] https://de.statista.com/statistik/daten/studie/227370/umfrage/anteile-der-wirtschaftssektoren-am-bruttoinlandsprodukt-bip-in-polen/

[3]

https://de.statista.com/statistik/daten/studie/160142/umfrage/arbeitslosenquote-in-den-eu-laendern/

[4] https://www.google.com/finance/quote/PLN-USD?sa=X&ved=2ahUKEwi7zeDfo92NAxWbhv0HHS0VPEUQmY0JegQIChAv

[5] https://de.investing.com/news/economy-news/polnische-zentralbank-erwagt-zinssenkungen-im-juli-oder-herbst-93CH-3000499