We derive our target price of SAR 180 using an average of: (1) P/E multiple valuation, applying 25x P/E to 2025e EPS, at a premium to US and EM peers reflecting higher growth potential, and (2) a DCF-based valuation (WACC of 9.5% and TGR of 2.5%), with higher WACC / lower TGR compared to what we use for KSA IT stocks.

We believe a High Risk rating is appropriate given its somewhat limited history of trading, share price volatility, and limited visibility on new contracts that may drive an upside risk.

Key downside risks to our forecast and target price include: failure to execute on new projects (Riyadh in particular), overhang risks / capital raise risks ; loss of existing contracts; macro and economic risks / lower ad spend; working capital risks; M&A execution risk; delays in mega-projects; and the short period of performance since the IPO.

Key upside risks include: new contracts and projects (e.g. Metro, Expo, opportunities in UAE), stronger margins, further improvement of terms of key contracts.