TMV: Cost Controls And Recurring Revenues Will Support Future Earnings Multiple Expansion

Analysts have slightly reduced their price target on TeamViewer to EUR 11 from EUR 14. This reflects modestly lower assumptions for fair value, revenue growth, and profit margins, even as the longer term earnings multiple outlook edges higher.

Analyst Commentary

Recent commentary highlights a balanced stance on TeamViewer, with the reduced price target reflecting both execution risks and the potential for stable, if moderating, growth.

Bullish Takeaways

• Bullish analysts see the new EUR 11 target as embedding more conservative assumptions, which may reduce downside risk if execution remains stable.
• They note that the maintained neutral rating suggests the core business model is intact, with recurring revenues still supporting a reasonable valuation floor.
• Some view the slight adjustment in long term earnings expectations as achievable if management continues to control costs and prioritize higher margin segments.
• The lower bar on growth and profitability could allow for upside surprise if product adoption or enterprise wins track ahead of the more cautious forecasts.

Bearish Takeaways

• Bearish analysts interpret the cut in the price target as a signal that near to medium term revenue growth is likely to trail earlier expectations, which could cap multiple expansion.
• They remain cautious that competitive pressures in remote connectivity and related software may weigh on pricing power and limit margin improvement.
• Concerns persist around execution risk, particularly the ability to convert the installed base into higher value subscriptions at the pace previously anticipated.
• The unchanged neutral rating, despite the lower fair value, is seen by some as an indication that risk and reward are currently balanced rather than compelling on the upside.

What's in the News

• Launched Tia, an autonomous, multi agent AI solution within TeamViewer ONE to detect, diagnose, and resolve IT issues across devices and systems, aiming to move from assistive to fully agentic IT support (Key Developments).
• Introduced Agentless Access in the Tensor platform, enabling secure remote work on OT machines and legacy devices without installing software on each endpoint, strengthening cybersecurity and simplifying industrial remote operations (Key Developments).
• Reported rapid adoption of TeamViewer AI, with over 270,000 IT support sessions automatically summarized in three months, 4x growth in session summaries, and notable gains in ticket documentation time and issue resolution speed (Key Developments).
• Confirmed 2025 revenue guidance within the original EUR 778 million to EUR 797 million range, while signaling results will likely come in at the low end after an ARR shortfall (Key Developments).
• Lowered preliminary 2026 revenue growth guidance to 2% to 6 percent year over year, or EUR 790 million to EUR 825 million, down from the prior EUR 850 million to EUR 870 million range (Key Developments).

Valuation Changes

• The fair value estimate has edged down slightly from €10.56 to €10.48, reflecting marginally more cautious assumptions.
• The discount rate has decreased slightly from 8.91 percent to 8.88 percent, implying a modestly lower required return.
• Revenue growth has fallen moderately from 7.15 percent to 6.83 percent, signaling a somewhat softer top-line outlook.
• The net profit margin has declined slightly from 19.91 percent to 19.67 percent, indicating a small anticipated compression in profitability.
• The future P/E has risen slightly from 12.12x to 12.27x, suggesting a modestly higher valuation multiple on forward earnings.