Defying the market trend
While 2020 saw the birth of a new stock market boom in the wake of the Corona breakout, the lockdowns as well as the resurgence of meme stocks, disillusionment came for many online brokers in 2021. The rapid growth of customers and the opening of new securities accounts, especially by a younger clientele, stagnated. Trading activities declined at many competitors, in some cases by more than 20%.
However, the wallstreet:online Group was able to clearly escape the general market trend with its Smartbroker, as the preliminary figures for the full year 2021 showed. As the Berlin-based company reported, revenue targets were significantly exceeded. The Group achieved a new revenue record of EUR 51.4 million in 2021, corresponding to a plus of 82% compared to the previous year. Preliminary adjusted EBITDA before customer acquisition costs for the Smartbroker rose by 45% to EUR 17.5 million. The Group's net liquidity at year-end 2021 was approximately EUR 20 million.
Leadership further expanded
As already shown in the Report 2021, the Smartbroker operated by wallstreet:online Capital AG is by far the largest neo broker in Germany when it comes to assets under custody. These rose by 105% across the Group to more than EUR 8.8 billion, which means an average of around EUR 36,000 per customer custody account. That puts the Berlin-based company miles ahead of peer groups such as Scalable Capital, which can boast around EUR 12,000 per customer custody account. The market leader Trade Republic has only EUR 6,000 per portfolio.
Successive further development
In 2022, the team around CEO Matthias Hach wants to keep the foot on the gas pedal. Accordingly, the Company expects sales of between EUR 62 million and EUR 67 million in 2022, which would mean an increase of around 25% year-on-year. Adjusted EBITDA after customer acquisition costs is expected to be between EUR 10 million and EUR 12 million, with current plans estimating expenses of around EUR 6 million for customer acquisition.
Start of a new era
Operationally, the focus is on implementing the Company's "Smartbroker Cloud Platform" and accelerating the new "Smartbroker 2.0". Here, the go-ahead is planned for the second half of 2022. The new platform is expected to represent a significant expansion and improvement for the Group's transaction segment. In addition to the completely redesigned desktop application, Smartbroker's management expects the launch of a new smartphone app before the end of the year, which should provide access to a new customer base. In 2022, more than 55,000 new customers are to be acquired for the brokerage segment, with almost a quarter of the annual target already having been achieved in the first two months of the current year with 13,000 new securities accounts. Important product and business initiatives are also planned for the Media segment in order to continue the profitable growth, such as the expansion of the smartphone apps of wallstreet-online.de and ariva.de and the establishment of an in-house trading editorial team.
Share with potential
Following the publication of the preliminary annual figures, several analyst firms commented positively on the wallstreet:online share, which is currently trading at EUR 17.20. Metzler Capital Markets sees Smartbroker 2.0. as a clear catalyst for revenue and earnings growth. The verdict is a "buy" with a price target of EUR 35, which results in around 100% price potential at the current level. Also a "buy" with a price target of EUR 32 would be the analysts of Alster Research, Warburg Research sees a fair value of EUR 34. 1
Interim conclusion
Operationally, the wallstreet:online Group was more than convincing in the full year 2021. Both the Community and Transaction divisions grew significantly stronger than expected. With its assets under custody, Smartbroker is by far the largest neobroker in Germany, but is significantly undervalued in contrast to its peer group. Moreover, the USP of the wallstreet:online group with the dovetailing of the two segments is by no means included in the valuation.
