EFN Finansmagasinet issues a buy recommendation on technology company Dynavox Group, according to an analysis.

The advice is given after Dynavox doubled since the spin-off from Tobii in December 2021, and now has a high valuation of 33 times ev/ebit.

However, EFN points out that the company has great potential to lift both growth and margins (the target is over 15 percent, while it is currently at around 12 percent). The background is that the market for communication aids has a low penetration rate. In addition, competition is also low with Dynavox leading the market.

"With such a low market penetration, the risk of a saturated market in the near future is extremely low, instead the potential is very high," writes EFN.

If growth picks up, the margin is also expected to lift and the valuation to fall quickly, making the stock more appetizing.

"Analysts expect growth of 16 percent next year. The margin should go from around 12 to over 14 percent. All this adds up to earnings per share growth of over 50 percent by 2025. For 2026, analysts expect slightly lower growth, but that the margin will again increase by two percentage points to 16 percent. This means that the valuation will quickly come down. Today the company is trading at 33 times ev/ebit, but in 2026 with these assumptions we land at 16 times", writes EFN.

Dynavox is up 34 percent this year.