Rising costs and a tougher market environment force forecast adjustments
The market remains demanding, which in turn leads to a reduction in our revenue and margin forecasts for the coming years.
In the medium term, the company will additionally launch a new incentive program and communicate expected cost increases, including for sales teams.
We are also reviewing our long‑term assumptions regarding business profitability and revenue growth scale.
AI is changing the market, and IMS seeks new sources of scale and growth
We still believe the company aims for sales growth and will focus on that in the coming quarters. Our model does not assume acquisitions, and the potential for organic growth alone is, in our view, considerably lower than the board’s ambitious target of PLN 100 million in the near 3‑year horizon. This drives down the target price for IMS shares to PLN 2.87 per share (previously PLN 4).
At the same time, due to the share price decline since our last analysis, we maintain our “buy” recommendation. Artificial intelligence is affecting growth prospects. In recent months, AI has become extremely popular, and the dynamic development and adoption of this technology are driving an increasing number of business models. In this context, the IMS group is not immune to the changing market.
IMS focuses on growth despite rising competition
In our view, this is already visible, mainly at the level of average revenue per subscription location and the relative weakness of the audio and video segment compared to the more resilient aroma segment, which is better protected against observed competitive trends. Nevertheless, the company continues to grow at the subscription location level. IMS benefits from a high-quality music library and its legality.
We therefore do not believe the company’s business model is significantly threatened. Increased competition will, however, affect the level of realized margins and highlight the need to strengthen other business branches. In this context, the advertising segment, which has been struggling for two years, may gradually get back on track.
The board does not give up and targets PLN 100 million in revenue. The IMS board remains consistent in its desire to scale the business and aims for PLN 100 million in revenue. Recent announcements about a new incentive program for 2026–2028 and a change in dividend policy support this goal. We interpret this as a signal that negotiations regarding the previously mentioned 1–2 acquisitions are likely moving in a positive direction, forming the basis for the ambitious targets.
