Automotive And Diversified Sectors Will Yield Mixed Outcomes

Key Takeaways

• Diversification into high-growth sectors and advanced automation positions Aumann for sustainable multi-year expansion and reduced reliance on automotive markets.
  
• Strong balance sheet and technology leadership enable resilient growth, margin opportunities, and the ability to capitalize on rising decarbonization and evolving supply chain needs.
  
• Heavy dependence on the automotive sector and weak order trends threaten revenue stability, with diversification and profitability at risk amid persistent economic and industry headwinds.

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.

• The anticipated recovery in automotive investment as geopolitical uncertainties and tariffs subside, combined with continued robust growth in battery electric vehicle (BEV) sales globally, is set to drive increased order intake and revenue growth for Aumann's e-mobility solutions.
  
• Aumann's strategic diversification into fast-growing sectors outside automotive-particularly aerospace, defense, cleantech, and life sciences-leverages rising automation and smart manufacturing demand, supporting multi-year expansion in revenue streams and mitigating sector concentration risk.
  
• Heightened regulatory and societal focus on decarbonization, including substantial government investments (e.g., Germany's €500bn infrastructure/climate package), is accelerating demand for automated solutions in renewables and energy storage, underpinning long-term growth in order intake and backlog.
  
• Aumann's technology leadership in modular, flexible, and highly automated production lines for new battery types and magnet-free e-motor designs positions the company to capture share as customers adapt to evolving supply chain challenges (e.g., rare earth restrictions), supporting resilient revenue and margin opportunities.
  
• The strong balance sheet and significant net cash position enables Aumann to pursue organic growth and targeted M&A, accelerating expansion in Next Automation and new verticals, which is expected to bolster both future top-line growth and sustain attractive profit margins.

Aumann Future Earnings and Revenue Growth

Assumptions

• Analysts are assuming Aumann's revenue will decrease by 0.2% annually over the next 3 years.
• Analysts assume that profit margins will shrink from 6.6% today to 5.9% in 3 years time.
• Analysts expect earnings to reach €16.7 million (and earnings per share of €1.26) by about August 2028, down from €18.7 million today.
• In order for the above numbers to justify the analysts price target, the company would need to trade at a PE ratio of 10.4x on those 2028 earnings, up from 8.3x today. This future PE is lower than the current PE for the GB Machinery industry at 19.0x.
• Analysts expect the number of shares outstanding to decline by 7.0% per year for the next 3 years.
• To value all of this in today's terms, we will use a discount rate of 5.86%, as per the Simply Wall St company report.

Aumann Future Earnings Per Share Growth

Risks

• Sharp declines in order intake (down 31% year-over-year) and order backlog (down 44% year-over-year), with E-mobility order intake down 39% and backlog down 53%, signal a risk of sustained revenue contraction if weak automotive investment and market uncertainty persist, directly impacting future sales and earnings visibility.
  
• Persistent tariff dynamics, geopolitical volatility, and weak automotive sector investments are putting major customer capital projects on hold, creating elevated revenue cyclicality and hampering topline growth despite positive long-term BEV sales trends.
  
• A heavy current reliance on the E-mobility/automotive segment exposes Aumann to deep sectoral downturns or technological shifts; should EV demand growth plateau or automakers delay or cancel capex, Aumann's revenue streams may become increasingly volatile.
  
• While margins have been maintained through strict cost management and favorable procurement, the challenging environment for new orders could pressure pricing and squeeze profitability if competitive pressures or inflationary input costs intensify in future periods, endangering net margins and overall profit levels.
  
• Transitioning and scaling into new markets (like cleantech, aerospace, and life sciences) may take longer than expected to offset automotive weakness; uncertainties around the success and timing of these diversification efforts pose risks to sustained revenue growth and earnings stability.

Valuation

• The analysts have a consensus price target of €13.3 for Aumann based on their expectations of its future earnings growth, profit margins and other risk factors. 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 analyst's consensus, you'd need to believe that by 2028, revenues will be €283.3 million, earnings will come to €16.7 million, and it would be trading on a PE ratio of 10.4x, assuming you use a discount rate of 5.9%.
  
• Given the current share price of €10.78, the analyst price target of €13.3 is 18.9% 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.