LIND RESEARCH
Research Note | Premium Equity Research
The Thesis Still holds
The share price performance for PTRK has been lackluster over the past few months. Therefore, we find it beneficial to conduct an investment thesis check to see whether our view still holds. Our conclusion is that it does. In this note, we also comment on the latest news and expectations for Q4.
Latest News
There have been two smaller announcements from Physitrack (PTRK) over the past few days.
PTRK will release a preliminary trading update for Q4 full-year figures on January 29th. This is not something that the company has done before (a trading update).
Matthew Poulter has been appointed to the permanent CFO position, following his interim role.
In this short note, we present our views on the news, look at traffic numbers for the quarters (which are a good indicator of new license intake), and give a brief investment thesis check-in, since the share price has fallen quite a bit since Q3.
CFO Switch, an Expected Move
Matthew Pulter now assumes the permanent CFO role; up until now, he held the interim CFO role as Charlotte Goodwin was on maternity leave. Matthew had been in the Head of Finance role at Physitrack since 2021.
Overall, this was quite an expected change. Our interactions with Matthew have been great, and we believe he is competent in the role.
The Trading Update
PTRK announced that they will publish an unaudited trading update for Q4 and the whole year on January 29. We reached out to management and got this explanation:
Q: Why is Physitrack issuing a trading update for Q4 ahead of the annual report?
A: Physitrack is issuing a Q4 trading update to ensure the market and internal teams do not need to wait several months for information while the annual audit is completed. Due to the company’s more extensive and rigorous audit process, the full-year reporting cycle can take up to two months or more. The trading update allows for more timely disclosure of performance.
Q: Is this trading update a one-off, or will Physitrack do this every quarter?
A: This is a permanent arrangement for Q4 only. For the fourth quarter, Physitrack will consistently issue a trading update ahead of the audited annual results.
Q: What about the other quarters?
A: For Q1, Q2, and Q3, Physitrack expects to continue publishing results within approximately three weeks of the quarter-end, as per its normal reporting schedule.
When we first saw the announcement, one thought was that PTRK saw strong numbers and wanted to show them quickly, which is most often the case when a company announces that it will release preliminary figures. That might still be the case here, but the main reason seems to be improved market communication and transparency, which we applaud.
Our expectations for Q4
A part of Lifecare's new customer intake is driven by website visitors who come through SEO funnels and sign up as users. Therefore, we believe that tracking the website traffic gives a fairly good indication of new licensee intake.
We believe that Q3's flatish development in Lifecare's licenses was partly driven by a decrease in website visitors from July to September. Our numbers are based on third-party estimates, so the absolute figures are not 100% accurate, but our experience shows the trend is usually relatively accurate. Q4 looks stronger than Q3, so we expected to see a slight rebound and increased Q/Q license figures.
For Q4, we expect Group revenue of €3.6m. Group-level revenue is heavily affected by Wellness's business divestments, all well in our view. We think adjusted EBITDA-C to be around €0.4m.
We focus on the development within Lifecare, which is the core pillar of our investment thesis of PTRK. For Lifecare, we expect to see revenue of €2.9m, up 6% Y/Y. If you want to dig deeper into PTRK's financials, we have attached our financial model for the company at the end of this note.
Thesis check-in
The share price performance of PTRK over the past months has been poor. When that happens, it’s always good to go back to your thesis of owning the share in the first place to check if something has changed or if the thesis has drifted.
Our core pillars in the investment thesis for PTRK rest on the following:
Lifecare is a good-to-great business, but it’s underappreciated by the market.
Check-in: This still holds true. We feel Q3 growth was a bit weak, which we attribute to declines in SEO traffic. We still believe Lifecare is a good business in a growing segment with strong current and long-term earnings power, but we will focus on following fundamentals over the coming quarters.
Lifecare’s value is hidden due to poor Wellness performance.
Check-in: We believe this still holds true as the market is slow to react to business changes, but we view the actual issue as fixed. Management has taken decisive actions through the divestment of clinics and the reduction of unprofitable Wellness revenue, which will take a few quarters to shine through in the Group figures.
The reporting structure makes it difficult to understand the fundamental development.
Check-In: In our view, management has sorted this out, and it has been significantly improved over the past three reports. This can no longer act as. value-enhancing action, but it helps when markets turn back to focusing on business fundamentals again.
Overhang in the share creates selling pressure.
Check-In: The overhang are now gone, something we helped facilitate. The overhang came from a co-founder and major shareholder who was no longer active in the company and had been selling at a premium to the market on a relatively fixed basis over the past three years. Since then, the volumes have been very low. We view this as a crucial part of our investment thesis that is fixed. Now, when there is positive development and no latent selling pressure, the share price can actually start reflecting the fundamentals. As such, we see this issue as fixed, but it has not started to affect the valuation yet, so it’s still in play.
Small/microcaps out of favor creates mispricing.
Check-In: This still holds true, and we honestly have a hard time pointing out when this might change. The lack of interest in micro/smallcaps remains a reason PTRK is underpriced, but we can’t say when it will change. Maybe 2026 will be different, perhaps not.
Overall, we do not believe our thesis has drifted. The core point is a hidden-value case in which Lifecares' business qualities are not correctly appreciated by the market due to the factors mentioned above. Plenty of actions have been taken, and we would expect the market to show greater appreciation for Lifecare in 2026.
Catalysts to watch
Here are catalysts we think will help close the value gap in PTRK during 2026.
Q4 trading update: As discussed earlier, the preliminary Q4 numbers will be released on January 29. The reason for starting with the trading update might be strong numbers, but we do not know.
USA deal: Hiring activity remains high in the USA, as indicated by LinkedIn posts and job postings. We think it’s plausible that a larger deal or order could be announced from the USA in the coming months.
No more adjusted numbers: Most investors do not dig deeper than the headline numbers. For PTRK, which has undergone significant changes, one must dig deeper to understand the underlying development of the business. We expect that the adjustments will decrease and hopefully be gone in Q3 and beyond for PTRK. We think that will help the market price the company correctly.
You can find our latest update on PTRK here, where we focus on the compelling risk-reward profile we see at current share price levels.
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Disclaimer
This analysis represents the independent views of Lind Research and is based on publicly available information believed to be reliable, but no warranty is given as to its accuracy or completeness. Nothing herein is investment advice or a recommendation. We publish openly, and companies do not influence our conclusions. Lind Research may hold positions in securities discussed.
Analyst owns shares? Yes
Lind Research