Napatech A/S (NAPA.OL) | Investment Case

1. Company Snapshot

1.a. Company Description

Napatech A/S provides reconfigurable computing solutions for the network management and cybersecurity applications worldwide.The company offers Link Capture Software that enables packet capture with nanosecond timestamping and replay with precise inter-frame gap control; Link Inline Software, which provides a processing architecture that offloads and accelerates flow aware application data planes; Link Virtualization Software that offloads and accelerates the Open vSwitch data plane to enhance CPU efficiency and network performance; and Link Programmable, which enables end users and OEMs to deploy FPGA computation solutions on SmartNIC platform, as well as Link-Assure professional services.It also provides solutions for telecom operators, cloud and data center service providers, and infrastructure and defense, as well as financial services, cyber security, network management, and virtualization.

The company was incorporated in 2003 and is headquartered in Copenhagen, Denmark.

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1.b. Last Insights on NAPA

Napatech A/S faces challenges due to intense competition in the SmartNICs and IPUs market. The company's recent partnership with SigmaX.AI may not be enough to offset these pressures. Additionally, the company's dependence on a limited number of large customers poses a risk to its revenue stability. According to a recent report by Danske Bank, Napatech's Q2 earnings were negatively impacted by lower-than-expected sales, leading to a downgrade of the company's rating to "Sell" from "Neutral".

1.c. Company Highlights

Last Price	33.7
Change Percentage	1.20%
Open	33.5
Previous Close	33.3
Market Cap ( Millions)	3710
Volume	186607
Year High	35.4
Year Low	17.1
M A 50	28.21
M A 200	23.55

FCF Yield	-4.82%
Dividend Yield	0.00%
ROE	-66.46%
Debt / Equity	22.55%
Net Debt / EBIDTA	103.29%
Price To Book	10.85
Price Earnings Ratio	-21.54
Price To FCF	-20.74
Price To sales	18.51
EV / EBITDA	-27.71

2. Transcript Summary

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3. NewsRoom

Napatech AS (STU:NAT) Half Year 2025 Earnings Call Highlights: Strong Revenue Growth Amidst ...

Aug -28

Source:

High Growth Tech Stocks In Europe ParTec And Two Promising Contenders

Jun -16

Source:

Napatech Optimizes Datacenter Infrastructure for Artificial Intelligence

Sep -23

Source:

Napatech and SigmaX.AI Rescue Networks Drowning in AI Data Overload

Aug -22

Source:

Napatech Leaps Into Market For Data Center Infrastructure Processing Units

Sep -14

Source:

Napatech launches 5G User Plane Function offload solution on its Intel Agilex® FPGA-based 400Gbps SmartNIC

Sep -12

Source:

Napatech and Jabil Collaborate on Innovative Server Platform for High-Bandwidth, Low-Latency Fintech Applications

Jun -21

Source:

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (10.90%)

6. Segments

SmartNIC

Expected Growth: 10.9%

Napatech A/S's SmartNIC growth is driven by increasing demand for high-performance computing, cloudification, and 5G networks. The need for accelerated packet processing, low latency, and high throughput in data centers and telecom infrastructure fuels adoption. Additionally, the growing importance of cybersecurity, network monitoring, and analytics further propels the segment's 10.9% growth.

Engineering Services

Expected Growth: 10.88%

Napatech A/S's 10.88% growth in Engineering Services is driven by increasing demand for high-speed data processing and network monitoring solutions, fueled by 5G adoption, IoT expansion, and cybersecurity concerns. Additionally, the company's focus on FPGA-based solutions and strategic partnerships with leading network equipment providers contribute to its growth momentum.

7. Detailed Products

SmartNICs

Napatech's SmartNICs are high-performance network interface cards that provide real-time network traffic analysis and processing capabilities.

NT Series

The NT Series is a family of programmable network accelerators that provide high-performance packet processing and analysis capabilities.

Link Capture Software

Napatech's Link Capture Software is a powerful tool for capturing and analyzing network traffic, providing detailed insights into network performance and security.

NT-Hardware

Napatech's NT-Hardware is a range of programmable hardware accelerators that provide high-performance processing and analysis capabilities for network traffic.

Software Development Kit (SDK)

Napatech's SDK provides a comprehensive set of tools and APIs for developing custom network applications and integrating Napatech's products with existing systems.

8. Napatech A/S's Porter Forces

Forces Ranking

Threat Of Substitutes

Napatech A/S faces moderate threat from substitutes, as customers have limited alternatives for high-performance network interfaces and adapters.

Bargaining Power Of Customers

Napatech A/S has a diverse customer base, which reduces the bargaining power of individual customers, giving the company an upper hand in negotiations.

Bargaining Power Of Suppliers

Napatech A/S relies on a few key suppliers for components, giving them some bargaining power, but the company's strong relationships and diversified supply chain mitigate this risk.

Threat Of New Entrants

The high barriers to entry in the network interface and adapter market, including significant R&D investments and regulatory hurdles, make it difficult for new entrants to challenge Napatech A/S.

Intensity Of Rivalry

The network interface and adapter market is highly competitive, with several established players, leading to intense rivalry and pricing pressure on Napatech A/S.

9. SWOT Analysis

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

	Value
Debt Weight	31.86%
Debt Cost	3.95%
Equity Weight	68.14%
Equity Cost	8.10%
WACC	6.78%
Leverage	46.76%

11. Quality Control: Napatech A/S passed 2 out of 9 key points

Strong Liquidity

Low Deb

Strong Interest Coverage

Healthy Cash Flow

Operating Efficiency

Strong Return On Equity

Consistent Revenue Growth

Consistent Operating Cash Flow Growth

Margin Improvement

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

AudioCodes

A-Score: 5.1/10

Value: 5.8

Growth: 5.7

Quality: 5.9

Yield: 6.9

Momentum: 5.0

Volatility: 1.7

1-Year Total Return ->

Invisio

A-Score: 4.6/10

Value: 0.0

Growth: 8.3

Quality: 7.9

Yield: 0.6

Momentum: 8.0

Volatility: 3.0

1-Year Total Return ->

Satixfy

A-Score: 4.4/10

Value: 8.0

Growth: 2.7

Quality: 5.6

Yield: 0.0

Momentum: 10.0

Volatility: 0.3

1-Year Total Return ->

HMS Networks

A-Score: 3.8/10

Value: 0.2

Growth: 7.1

Quality: 6.3

Yield: 0.6

Momentum: 6.0

Volatility: 2.7

1-Year Total Return ->

Ceragon Networks

A-Score: 3.6/10

Value: 6.3

Growth: 6.9

Quality: 4.9

Yield: 0.0

Momentum: 3.0

Volatility: 0.7

1-Year Total Return ->

Napatech

A-Score: 2.3/10

Value: 6.0

Growth: 0.0

Quality: 4.4

Yield: 0.0

Momentum: 2.5

Volatility: 0.7

1-Year Total Return ->

Peers Metrics

12.e Scoring ^Insights

12.f DCF ^BETA

Parameters

Short Term Growth

30.59%

Short term Time

10.0

Long-Term Growth

2.00%

WACC

6.78%

Napatech A/S - DK0060520450

1. Company Snapshot

1.a. Company Description

1.b. Last Insights on NAPA

1.c. Company Highlights

Strong Momentum

Lower Growth

More Volatile

Revenues Miss

Earnings Miss

Revenues Beats

Average Yield

Stable Momentum

Weak Momentum

Medium Volatility

2. Transcript Summary

3. NewsRoom

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (10.90%)

6. Segments

SmartNIC

Expected Growth: 10.9%

Engineering Services

Expected Growth: 10.88%

7. Detailed Products

SmartNICs

NT Series

Link Capture Software

NT-Hardware

Software Development Kit (SDK)

8. Napatech A/S's Porter Forces

Forces Ranking

Threat Of Substitutes

Bargaining Power Of Customers

Bargaining Power Of Suppliers

Threat Of New Entrants

Intensity Of Rivalry

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

11. Quality Control: Napatech A/S passed 2 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

33.7$

Current Price

33.7$

Potential

-0.00%

Expected Cash-Flows

12.e Scoring ^Insights

12.f DCF ^BETA