New Risk • Oct 02
New major risk - Revenue and earnings growth Earnings are forecast to decline by an average of 2.2% per year for the foreseeable future. This is considered a major risk. Ultimately, shareholders want to see a good return on their investment and that generally comes from sharing in the company's profits. If profits are expected to decline, then in most cases the share price will decline over time as well. In addition, if the company pays dividends it will also likely need to reduce or cut them, striking a dual blow to total shareholder returns. Currently, the following risks have been identified for the company: Major Risk Earnings are forecast to decline by an average of 2.2% per year for the foreseeable future. Minor Risk Market cap is less than US$100m (€88.4m market cap, or US$97.8m). Reported Earnings • Oct 01
First half 2024 earnings released First half 2024 results: Revenue: €16.3m (up 20% from 1H 2023). Net income: €4.11m (up 165% from 1H 2023). Profit margin: 25% (up from 11% in 1H 2023). The increase in margin was driven by higher revenue. Revenue is forecast to grow 10% p.a. on average during the next 2 years, compared to a 5.7% growth forecast for the Professional Services industry in Europe. New Risk • Jul 29
New minor risk - Share price stability The company's share price has been volatile over the past 3 months. It is more volatile than 75% of German stocks, typically moving 6.6% a week. This is considered a minor risk. Share price volatility indicates the stock is highly sensitive to market conditions or economic conditions rather than being sensitive to its own business performance, which may also be inconsistent. It also increases the risk of potential losses in the short term as the stock tends to have larger drops in price more frequently than other stocks. Currently, the following risks have been identified for the company: Major Risk High level of non-cash earnings (24% accrual ratio). Minor Risks Share price has been volatile over the past 3 months (6.6% average weekly change). Profit margins are more than 30% lower than last year (12% net profit margin). Market cap is less than US$100m (€89.4m market cap, or US$97.1m). Valuation Update With 7 Day Price Move • Jun 27
Investor sentiment deteriorates as stock falls 16% After last week's 16% share price decline to €3.31, the stock trades at a forward P/E ratio of 20x. Average forward P/E is 15x in the Professional Services industry in Europe. Total loss to shareholders of 22% over the past year. Reported Earnings • Apr 15
Full year 2023 earnings released Full year 2023 results: Revenue: €29.7m (up 20% from FY 2022). Net income: €3.43m (down 18% from FY 2022). Profit margin: 12% (down from 17% in FY 2022). The decrease in margin was driven by higher expenses. Revenue is forecast to grow 7.0% p.a. on average during the next 2 years, compared to a 5.6% growth forecast for the Professional Services industry in Europe. New Risk • Apr 14
New minor risk - Financial data availability The company's latest financial reports are more than 6 months old. Last reported fiscal period ended June 2023. This is considered a minor risk. If the company has not reported its earnings on time, it may have been delayed due to audit problems or it may be finding it difficult to reconcile its accounts. Currently, the following risks have been identified for the company: Major Risk High level of non-cash earnings (24% accrual ratio). Minor Risk Latest financial reports are more than 6 months old (reported June 2023 fiscal period end). Buying Opportunity • Dec 24
Now 21% undervalued Over the last 90 days, the stock is up 4.5%. The fair value is estimated to be €4.81, however this is not to be taken as a buy recommendation but rather should be used as a guide only. Revenue is forecast to grow by 35% in 2 years. Earnings is forecast to grow by 43% in the next 2 years. Valuation Update With 7 Day Price Move • Nov 27
Investor sentiment improved over the past week After last week's 17% share price gain to €3.85, the stock trades at a forward P/E ratio of 21x. Average forward P/E is 16x in the Professional Services industry in Europe. Total loss to shareholders of 24% over the past year. Reported Earnings • Sep 24
First half 2022 earnings released: EPS: €0 (vs €1.04 in 1H 2021) First half 2022 results: EPS: €0. Revenue: €11.0m (up 8.0% from 1H 2021). Net income: €2.11m (up 11% from 1H 2021). Profit margin: 19% (in line with 1H 2021). Revenue is forecast to grow 16% p.a. on average during the next 3 years, compared to a 5.9% growth forecast for the Professional Services industry in Europe. Buying Opportunity • Aug 18
Now 23% undervalued after recent price drop Over the last 90 days, the stock is down 16%. The fair value is estimated to be €5.15, however this is not to be taken as a buy recommendation but rather should be used as a guide only. For the next 3 years, revenue is forecast to grow by 15% per annum. Earnings is also forecast to grow by 14% per annum over the same time period. Buying Opportunity • Jun 29
Now 21% undervalued after recent price drop Over the last 90 days, the stock is down 25%. The fair value is estimated to be €4.50, however this is not to be taken as a buy recommendation but rather should be used as a guide only. For the next 3 years, revenue is forecast to grow by 15% per annum. Earnings is also forecast to grow by 14% per annum over the same time period. Valuation Update With 7 Day Price Move • May 21
Investor sentiment improved over the past week After last week's 16% share price gain to €4.71, the stock trades at a forward P/E ratio of 25x. Average forward P/E is 17x in the Professional Services industry in Europe. Reported Earnings • Apr 20
Full year 2021 earnings released Full year 2021 results: Revenue: €21.3m (up 23% from FY 2020). Net income: €3.74m (up 370% from FY 2020). Profit margin: 18% (up from 4.6% in FY 2020). The increase in margin was driven by higher revenue. Over the next year, revenue is forecast to grow 13%, compared to a 9.6% growth forecast for the industry in Germany.