After their Q1 results were announced today, the stock price of Cint Group AB dropped by almost 39%. The stock price decline was driven by the company’s weaker-than-expected financial performance, with net sales falling by 11.1% and adjusted EBITDA declining by 54.3% compared to the same period in the previous year.
The leading Swedish finance site Dagens Industri commented on the results “The loss of confidence in the main owner Nordic Capital is even greater. Cint’s acquisition of the American company Lucid for SEK 11 billion increasingly appears to be the worst deal a Swedish publicly traded company has made in several years.”
The stock price also reflected concerns about the company’s ongoing platform integration process, which could be more complex and time-consuming than previously anticipated. These challenges prompted several analysts to downgrade their rating for the stock and lower their price target. As a result, Cint’s share price fell to SEK 8.88 (-38.97%) at the close of trading on the day following the announcement.
According to Cint’s CEO Giles Palmer, “Cint’s financial performance in the first quarter continued to be impacted by macro headwinds, integration work and lingering issues with reversals”. Reversals refer to invalid market research interviews that are deemed unusable by Cint’s clients due to low-quality answers, which results in a negative impact on revenue. This was also previously reported in their 2022 Q4 results.
Cint has acknowledged the importance of addressing the issue and has taken steps to improve the quality of its data, such as implementing quality checks and increasing the incentives offered to survey respondents. However, it remains to be seen if these efforts will be sufficient to address the issue and improve the company’s revenue performance.
These results come soon after another market research company, Ipsos, reported a 2.9% drop in their Q1 revenues.
For more context, check our overview of Cint Group Panel Sites.