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Investing.com -- J.P.Morgan in a note dated Tuesday initiated coverage on Verisure Plc (ST:VSURE) with an “overweight” rating and a €18.40 price target, saying the company’s subscription-based model, recurring revenue base and falling leverage support its investment case.
The brokerage said Verisure is the leading provider of professionally monitored home-security systems across Europe and Latin America, operating a vertically integrated platform that designs hardware, installs devices for an upfront fee and provides 24/7 monitoring for a monthly charge.
The company reported €3.4 billion in revenue and €819 million in adjusted EBIT for 2024, with a 24% margin, and serves more than 5.8 million customers across 17 markets.
J.P.Morgan said Verisure’s customer base is “sticky,” noting a 7.4% attrition rate as of the first half of 2025 and an average customer lifetime of about 15 years.
The brokerage cited Verisure’s reported €34 monthly EBITDA per customer in the period, representing a 74% margin, as a key driver of its internal funding model.
The analysts said the company’s profitable portfolio services segment finances customer acquisition, which totalled €1.2 billion in 2024 for 840,000 installations.
The brokerage highlighted what it described as significant room for penetration gains. Verisure estimates a total addressable market of about 436 million residential properties and small businesses, with professionally monitored systems installed in fewer than 4% of locations and 11% of its serviceable addressable market.
The analysts referenced Verisure’s comparison with the United States, where penetration is roughly 23%.
J.P.Morgan projected FY25–29 revenue and EBIT compound annual growth rates of 9% and 12%, respectively, and said its higher EBIT growth forecast reflects operational leverage.
It also forecast medium-term annual recurring revenue growth of about 10%, driven mainly by subscriber additions and supported by steady expansion of average revenue per user.
The brokerage said leverage is expected to fall to 2.9x by December 2025 from 4.8x at the end of 2024, primarily due to roughly €3 billion in IPO proceeds, and to 2.5x in 2026.
Management has said it intends to keep leverage between 2.5x and 2.75x after 2026 and return surplus capital to shareholders when appropriate, J.P.Morgan noted.
J.P.Morgan also outlined risks to the outlook, including slower consumer conditions affecting attrition or new subscriber growth, regulatory changes, reliance on third-party telecom infrastructure, cyber-security vulnerabilities, and potential pressure from new entrants or competing security technologies.
The brokerage said newly listed companies with premium valuations and reduced disclosure histories can be particularly sensitive to earnings misses.
Verisure’s management team, led by Chief Executive Austin Lally and Chief Financial Officer Colin Smith, was described as experienced in consumer and telecom sectors. The firm’s post-IPO structure includes Hellman & Friedman retaining a 44% stake, down from 59% before the listing.
J.P.Morgan said its €18.40 valuation is based on a discounted cash-flow model and implies a 14% upside from the price referenced in the note.