Regulatory Reliance And Ongoing Losses Will Eventually Support Modest Upside Potential

Catalysts

About Banqup Group

Banqup Group provides a European software platform for e invoicing, payments and digital trust services for businesses and public sector clients.

What are the underlying business or industry changes driving this perspective?

• Although e invoicing mandates in Belgium, Croatia and Poland, along with the planned start in France in September 2026, create a clear regulatory push for Banqup's services across several countries, the heavy dependence on mandate timing means any delay or change in scope could limit expected subscription and transaction revenue growth.
• Although the company reports €47.7 million of annual recurring revenue and organic subscription revenue growth of 24.4%, the current adjusted EBITDA loss of €11.8 million shows that scaling the SaaS model is still costing more than it brings in, so a slower than expected improvement in operating leverage could hold back progress on EBITDA and earnings.
• While client money in Banqup payment accounts rose from €75.9 million at year end 2025 to €100 million by February 2026 and sits on top of a Visa partnership and open banking capabilities, tighter regulation or weaker cross sell into the existing invoicing base could limit the fee income and margin uplift the payments line might otherwise support.
• Although Banqup holds recognized positions in multiple European e invoicing markets with its own locally approved platforms, competitors that focus on single large markets or bundle services with broader ERP suites could pressure pricing and slow expansion, which would affect revenue growth and net margins in those regions.
• While the planned identity wallet under the EU eIDAS 2.0 framework and existing e trust capabilities position Banqup in a segment with rising digital identity requirements, the relatively high current CapEx of €17.5 million and the need to maintain 516 FTEs to support development mean that any delay in commercial uptake could keep free cash flow and earnings under strain for longer than investors might like.

Assumptions

How have these above catalysts been quantified?

• This narrative explores a more pessimistic perspective on Banqup Group compared to the consensus, based on a Fair Value that aligns with the bearish cohort of analysts.
• The bearish analysts are assuming Banqup Group's revenue will grow by 14.6% annually over the next 3 years.
• The bearish analysts are not forecasting that Banqup Group will become profitable in next 3 years. To represent the Analyst Price Target as a Future PE Valuation we will estimate Banqup Group's profit margin will increase from -73.9% to the average BE Software industry of 13.6% in 3 years.
• If Banqup Group's profit margin were to converge on the industry average, you could expect earnings to reach €10.8 million (and earnings per share of €0.29) by about September 2029, up from -€39.3 million today.
• In order for the above numbers to justify the price target of the more bearish analyst cohort, the company would need to trade at a PE ratio of 18.3x on those 2029 earnings, up from -2.1x today. This future PE is lower than the current PE for the BE Software industry at 57.3x.
• The bearish analysts expect the number of shares outstanding to remain consistent over the next 3 years.
• To value all of this in today's terms, we will use a discount rate of 10.01%, as per the Simply Wall St company report.

Risks

What could happen that would invalidate this narrative?

• Banqup is highly exposed to e‑invoicing mandates in Belgium, Croatia, Poland and France. Any delay, policy reversal or narrowing of scope in current or future regulations could reduce the structural tailwind for adoption and weigh on subscription revenue growth and transaction volumes, which would filter through to earnings.
• The business remains loss making on an adjusted EBITDA basis at €11.8 million and carries net financial debt of €38.3 million against cash of €8.6 million. If the shift to a SaaS‑driven model takes longer than expected or cost reductions are slower, the company could face ongoing pressure on EBITDA, free cash flow and ultimately equity value.
• The Visa partnership, open banking payment capabilities and growing client money of €100 million in Banqup accounts rely on successful cross‑sell into the invoicing base and supportive regulation. Weaker customer uptake or tighter rules on client funds and payment fees could limit margin potential from payments and keep net margins under strain.
• Banqup is investing heavily in digital trust and identity wallet capabilities ahead of the EU eIDAS 2.0 framework, with CapEx of €17.5 million and 516 FTEs. If commercial adoption of identity wallet and e‑trust services is slower than expected, these longer‑term projects could continue to dilute free cash flow, EBITDA and earnings.
• The company positions itself as a European, cross‑border e‑invoicing and payments platform, yet it operates in markets where local providers, ERP vendors and competitors like Tessi in France may compete aggressively on price and integration. This competition could limit Banqup's ability to scale ARR from its current €47.7 million level and compress gross margin and net margins over time.

Valuation

How have all the factors above been brought together to estimate a fair value?

• The assumed bearish price target for Banqup Group is €4.0, which represents up to two standard deviations below the consensus price target of €4.1. This valuation is based on what can be assumed as the expectations of Banqup Group's future earnings growth, profit margins and other risk factors from analysts on the more bearish end of the spectrum.
• In order for you to agree with the more bearish analyst cohort, you'd need to believe that by 2029, revenues will be €79.8 million, earnings will come to €10.8 million, and it would be trading on a PE ratio of 18.3x, assuming you use a discount rate of 10.0%.
• Given the current share price of €2.27, the analyst price target of €4.0 is 43.2% higher.
• We always encourage you to reach your own conclusions though. So sense check these analyst numbers against your own assumptions and expectations based on your understanding of the business and what you believe is probable.