Original-Research: q.beyond AG (von NuWays AG): Buy
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Original-Research: q.beyond AG - from NuWays AG
27.01.2025 / 09:01 CET/CEST
Dissemination of a Research, transmitted by EQS News - a service of EQS
Group.
The issuer is solely responsible for the content of this research. The
result of this research does not constitute investment advice or an
invitation to conclude certain stock exchange transactions.
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Classification of NuWays AG to q.beyond AG
Company Name: q.beyond AG
ISIN: DE0005137004
Reason for the research: Update
Recommendation: Buy
from: 27.01.2025
Target price: EUR 1.10
Target price on sight of: 12 months
Last rating change:
Analyst: Philipp Sennewald
Profitable growth ahead after transitionary FY24e
After a rather uninspiring operating performance in FY23, FY24e is seen to
have already benefited significantly from the imposed efficiency measures,
leading to substantial bottom-line improvements. In fact, EBITDA is seen to
improve by a whopping 286% to EUR 9.3m (FY23 EBITDA adjusted for positive
effects in connection with favorable decisions by tax authorities) on the
back of an improved nearand off-shore ratio as well as a higher utilization
in the consulting segment.
That being said, like in the previous year the company is expected to
release preliminary FY figures in early March (final: 31st March), as well
as an initial guidance for FY25e. As management repeatedly stated, we expect
the outlook to target continued FCF expansions (eNuW: EUR 9.8m) as well as
positive net income (eNuW: EUR 2.1m) alongside mid-SD sales growth (eNuW:
+5.9%). Besides this, the company already provided an EBTIDA margin target
of 7-8% (eNuW: 7.1%) for FY25e.
The main driver behind the continuous margin expansion should be the ongoing
implementation of one.q.beyond as well as the Strategy 2025, with which
management is setting three strategic priorities. (1) Ongoing focus on key
verticals (retail, logistics, manufacturing) coupled with an increased focus
on consulting and development, which in the end facilitates gaining new
orders for operations. (2) Further increasing the near- and off-shoring
ratio to 20+% (Q3'24: 13%, mid-term target: 30+%), allowing for gross margin
expansion. According to the rule of thumb, a 5pp increase in near- and
off-shoring leads to a 1pp increase of the gross margin. (3) Higher emphasis
on AI in all business areas (1st level service, development & resource
planning) allowing for a reduced fixed cost base.
While some off those measures already borne fruit, visible in the improved
profitability and cash generation in FY24e, we expect further efficiency
potential to unfold from 2025e onwards, which should allow for EBITDA
margins of 10+% in the mid-term (eNuW).
In addition, we expect the company to close at least one acquisition in
FY25e based on management's indications as well as the strong net cash
position of EUR 36m. Here, it seems likely that management targets to enter
new verticals (i.e. public sector, energy, healthcare) or regional markets.
In our view, targets should be in the range of EUR 10-20m sales as well as
cash generative. Mind you, future M&A is not reflected in our model and is
thus providing upside to our estimates.
That said, the investment case remains fully intact as operations are set to
further improve going forward. Moreover, trading at only 3.1x EV/EBITDA
FY25e, the stock looks undoubtedly cheap. We hence reiterate BUY with an
unchanged EUR 1.10 PT based on DCF.
You can download the research here: http://www.more-ir.de/d/31661.pdf
For additional information visit our website:
https://www.nuways-ag.com/research-feed
Contact for questions:
NuWays AG - Equity Research
Web: www.nuways-ag.com
Email: research@nuways-ag.com
LinkedIn: https://www.linkedin.com/company/nuwaysag
Adresse: Mittelweg 16-17, 20148 Hamburg, Germany
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Diese Meldung ist keine Anlageberatung oder Aufforderung zum Abschluss
bestimmter Börsengeschäfte.
Offenlegung möglicher Interessenskonflikte nach § 85 WpHG beim oben
analysierten Unternehmen befinden sich in der vollständigen Analyse.
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2074777 27.01.2025 CET/CEST
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