Global Electrification And Automation Will Expand Market Scope Despite Headwinds

Key Takeaways

• Broad sector trends understate Aumann's unique edge in advanced automation, positioning it for outsized growth across mobility, cleantech, and diversified high-margin industries.
  
• Shifts toward re-shoring, stimulus-backed sustainability, and new motor technologies amplify Aumann's market influence, profit profile, and strategic importance to OEMs.
  
• Heavy reliance on the automotive sector, declining orders, rising competition, and slow diversification threaten revenue stability, margin strength, and long-term earnings visibility.

Catalysts

Manufactures and sells specialized machines and production lines for electromobility, automation, and robot applications in Germany, rest of Europe, the United States, Canada, Mexico, China, and internationally.

• Analyst consensus sees e-mobility growth as a major revenue driver, but this underestimates Aumann's unique ability to capture disproportionate market share as nearly every core EV drivetrain component-from rotors, stators, batteries to inverters-can already be fully manufactured on its platforms, which positions the company for exponential revenue and order intake outperformance when the sector rebounds.
  
• Analysts broadly expect Next Automation's diversification to fuel solid margin expansion, yet this significantly downplays the runway-segment orders are already accelerating with high-margin opportunities in cleantech, aerospace, and life sciences, and management is shifting from an opportunistic to a strategic focus, setting up a step-change in both revenue mix quality and overall company net margin profile.
  
• With governments worldwide deploying unprecedented multi-hundred-billion-euro climate and energy transition stimulus, Aumann's expertise in modular automation and battery systems across non-automotive end-markets positions it to be the supplier of record in surging infrastructure, renewable, and hydrogen markets, fundamentally altering the long-term addressable revenue base.
  
• Global supply chain re-shoring, labor shortages, and political drives for critical manufacturing localization are catalyzing demand for fully automated, high-precision manufacturing in Europe and North America, where Aumann's leadership in advanced automation solutions makes it the natural partner for OEMs and drives sustained high-margin order books and earnings.
  
• Ongoing disruptions in rare earth markets are accelerating a major technology shift toward magnet-free, coil-winding motor designs-a field in which Aumann has deep process leadership-enabling it to capture premium pricing and increased share as automakers redeploy capex into next-generation electric motor manufacturing, driving higher product margins and multiyear earnings growth.

Aumann Future Earnings and Revenue Growth

Assumptions

• This narrative explores a more optimistic perspective on Aumann compared to the consensus, based on a Fair Value that aligns with the bullish cohort of analysts.
• The bullish analysts are assuming Aumann's revenue will grow by 1.1% annually over the next 3 years.
• The bullish analysts assume that profit margins will shrink from 6.9% today to 5.2% in 3 years time.
• The bullish analysts expect earnings to reach €16.9 million (and earnings per share of €1.18) by about August 2028, down from €21.5 million today. The analysts are largely in agreement about this estimate.
• In order for the above numbers to justify the price target of the more bullish analyst cohort, the company would need to trade at a PE ratio of 14.6x on those 2028 earnings, up from 7.8x today. This future PE is lower than the current PE for the GB Machinery industry at 18.2x.
• Analysts expect the number of shares outstanding to decline by 1.84% per year for the next 3 years.
• To value all of this in today's terms, we will use a discount rate of 5.87%, as per the Simply Wall St company report.

Aumann Future Earnings Per Share Growth

Risks

• Aumann's heavy reliance on the automotive sector, particularly electric vehicle drivetrain manufacturing, exposes it to sharp swings in demand if EV adoption slows, major automotive investments are put on hold, or auto OEMs shift production in-house, threatening future revenue stability and earnings visibility.
  
• The company is currently experiencing a significant drop in order intake and backlog, with a 31% year-over-year decline in order intake and a 44% decrease in order backlog, signaling that near-term and potentially long-term revenue growth is at risk as the broader investment climate remains subdued.
  
• Deglobalization, trade protectionism, and tariff escalation-highlighted by issues such as rare earth export controls from China-are already impacting project timing for customers, increasing input costs, and potentially compressing net margins for Aumann in future periods.
  
• Intensifying competition from Asian machinery producers with structurally lower costs, coupled with the accelerating shift by customers toward fully digitalized and integrated automation providers, may pressure Aumann's pricing power and profitability as traditional manufacturing systems become less differentiated.
  
• Failure to achieve a rapid and sizable transition into new verticals such as aerospace, cleantech, and life sciences could leave Aumann with underutilized manufacturing capacity and high fixed costs, increasing the risk of negative operational leverage and persistent pressure on both net margins and overall earnings.

Valuation

• The assumed bullish price target for Aumann is €16.0, which is the highest price target estimate amongst analysts. This valuation is based on what can be assumed as the expectations of Aumann's future earnings growth, profit margins and other risk factors from analysts on the bullish end of the spectrum.
  
• However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of €16.0, and the most bearish reporting a price target of just €10.6.
  
• In order for you to agree with the bullish analysts, you'd need to believe that by 2028, revenues will be €321.1 million, earnings will come to €16.9 million, and it would be trading on a PE ratio of 14.6x, assuming you use a discount rate of 5.9%.
  
• Given the current share price of €11.74, the bullish analyst price target of €16.0 is 26.6% higher. Despite analysts expecting the underlying buisness to decline, they seem to believe it's more valuable than what the market thinks.
  
• 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.