When I first heard about this company in an investment webinar, I looked it up on TIKR and realized it’s a microcap ($83M market cap), Italian (which usually means undervalued), and in a simple, easy-to-understand sector: fiber.
The company was founded in 1985 as a hardware business. Then, in 1994/95, it started developing as an ISP. In 1999, it was sold to Cable & Wireless, but it was reacquired in 2001. By 2002, the company had started deploying fiber and transitioned into a telecommunications provider operating in the Lazio region.
The company operates in these segments:
- Fiber
- Cloud & Data Center
- IoT
- Cybersecurity and managed services
This thesis is going to focus on the most important (and potentially high-growth) segment: fiber. And I love it because:
The other segments definitely have growth potential too, like datacenters (the company is building a completely green datacenter in Italy) and IoT (they deployed a LPWA network, which also has growth potential). But these segments are relatively small compared to fiber.
Financial overview
The company revenues has grown 63% CAGR from 2019, EPS in the same time 35%.
In 2023 the revenues growth 81% thanks to the acquisition of TWT which helped the company expand into Lombardia.
The main growth driver has been the expansion and deployment of fiber, both B2C and B2B.
In 2018 the fiber network covered 2,100 km, and as of the H1 2024 report, it has expanded to 7,400 km. By Q2 2025, a new submarine cable to southern Italy is expected to be completed—a project developed in partnership with Uniterreno (a Unidata subsidiary) and Azimut (an investment fund).
Related to margins, in 2024 the company is projected to reach a 26% EBITDA margin (consolidated with TWT). Their industrial plan 2025 target an improvement on EBITDA margin close to ~30% which is in line with the industry median.
Related to FCF generation, in recent years the FCF margin was small and even negative most of the years due to high CAPEX investment, but it’s expected to improve the coming years.
Related to debt the company always has a slow Net Debt / EBITDA ratio (below 1x) but in 2023 with the acquisition of TWT, the ratio up to 2x but it still manageable for this kind of company with highly recurring income.
When it comes to FCF generation, the margin has been small (and even negative in most years) due to heavy CAPEX investments. However, it’s expected to improve in the coming years.
When we see debt, the company has always kept a low Net Debt/EBITDA ratio (below 1x). But in 2023, following the TWT acquisition, the ratio jumped to 2x, still very manageable for a company with highly recurring revenue.
Next years
The company target to growth revenue by 12% and achieve an EBITDA margin between 29% – 30%, from 2025 to 2027 as their present in the industrial plan 2025.
Additionally, a €56 million CAPEX investment is planned until 2027, covering:
- Continued fiber network deployment.
- The completion of Uniterreno (submarine cable project).
- A new datacenter in Italy (Unicenter).
I agree with the target growth and I’m pretty confident they’ll be achieved, mainly because Italy still has low coverage of FTTH network (only 49% vs 69% avg EU).
Additionally the customers are shifting from big operators to smaller ones—a trend similar to what’s happening in Spain, where companies like DIGI has been rapidly gaining market share. The company highlights this:
To sum up, I see strong market growth potential in Italy, margin improvement, and high cash flow generation. And, the company stands to benefit from new segments as it continues to expand.
Valuation
When comparing Unidata’s valuation with similar companies in Italy, it’s clear that both the company and the sector are trading at depressed valuations.
All of them are affected by low valuation metrics due to their status as European microcaps, except for Intred, which is more efficient with a higher ROIC, better margins, and a larger market cap—hence the higher valuation.
I see an opportunity for multiple expansion over the next few years, targeting 6x EV/EBITDA and around 11x P/E and MC/FCF, which seems reasonable for Unidata. Also, companies like this have a high chance of being acquired by a larger player due to their low valuation and the fragmented market.
I’m estimating 10% growth, with the company reaching a 26% EBITDA margin in the coming years alongside multiple expansion:
A few key points to highlight:
- I don’t estimate buybacks (though they’re highly likely in the future, as the company has done them before)
- Dividend yield 0%
- FCF will be low in 2025 and 2026 due to an expected CAPEX of €56 million but should stabilize from 2027.
Using this, we get a high CAGR for 2026E:
| Multiple | Intrinsic Value 26E | Upside from €2.70 | |
|---|---|---|---|
| EV/EBITDA | 6x | €5,96 | 120% |
| P/FCF | 11x | €4,96 | 83% |
| P/E | 11x | €5,00 | 85% |
For this reason (and I think this is a conservative estimate), I expect strong growth for this stock.
I have opened a 10% weight position.
I do not hold a position with the issuer such as employment, directorship, or consultancy.
I hold a material investment in the issuer’s securities.
