Varta (XTRA:VAR1) - Share price, News & Analysis

Q: What is the Fair Price of VAR1 when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

VAR1 (€80.18) is trading below our estimate of [[fair value]] (€264.76)

VAR1 fundamental analysis
Snowflake Score
Valuation	4/6
Future Growth	3/6
Past Performance	2/6
Financial Health	6/6
Dividends	1/6

VAR1 Stock Overview

Varta AG, through its subsidiaries, researches, develops, produces, and sells microbatteries, household batteries, and energy storage solutions worldwide.

Rewards

Trading at 69.7% below our estimate of its fair value

Earnings are forecast to grow 11% per year

Earnings have grown 45.4% per year over the past 5 years

Risk Analysis

Dividend of 3.09% is not well covered by earnings or forecast to be in the next 3 years

High level of non-cash earnings

Varta Competitors

SGL Carbon

XTRA:SGL

€885.2m

SBF

DB:CY1K

€81.5m

Energiekontor

XTRA:EKT

€1.3b

KUKA

XTRA:KU2

€3.3b

Price History & Performance

Summary of all time highs, changes and price drops for Varta
Historical stock prices
Current Share Price	€80.18
52 Week High	€165.90
52 Week Low	€67.88
Beta	1.2
1 Month Change	-3.51%
3 Month Change	2.32%
1 Year Change	-50.01%
3 Year Change	11.98%
5 Year Change	n/a
Change since IPO	52.52%

Recent News & Updates

Jul 05

At €79.80, Is It Time To Put Varta AG (ETR:VAR1) On Your Watch List?

While Varta AG ( ETR:VAR1 ) might not be the most widely known stock at the moment, it received a lot of attention from...

Shareholder Returns

	VAR1	DE Electrical	DE Market
7D	1.2%	1.7%	1.1%
1Y	-50.0%	-29.7%	-20.0%

Return vs Industry: VAR1 underperformed the German Electrical industry which returned -29.6% over the past year.

Return vs Market: VAR1 underperformed the German Market which returned -20% over the past year.

Price Volatility

Is VAR1's price volatile compared to industry and market?
VAR1 volatility
VAR1 Average Weekly Movement	6.2%
Electrical Industry Average Movement	6.3%
Market Average Movement	5.7%
10% most volatile stocks in DE Market	10.7%
10% least volatile stocks in DE Market	2.8%

Stable Share Price: VAR1 is not significantly more volatile than the rest of German stocks over the past 3 months, typically moving +/- 6% a week.

Volatility Over Time: VAR1's weekly volatility (6%) has been stable over the past year.

About the Company

Founded	Employees	CEO	Website
1887	4,724	Herbert Schein	https://www.varta-ag.com

Varta AG, through its subsidiaries, researches, develops, produces, and sells microbatteries, household batteries, and energy storage solutions worldwide. It operates in two segments, Lithium-Ion Solutions & Microbatteries and Household Batteries. The Lithium-Ion Solutions & Microbatteries segment offers zinc-air batteries primarily for use in hearing aid devices; lithium-ion battery solutions for wireless headphones; wearables, which include medical devices to measure hypertension, blood sugar, and other bodily functions, as well as the power supply for COVID19 antibody tests; and rechargeable battery solutions for industrial and original equipment manufacturers for use in various applications, such as servers, car keys, alarm systems, or smart meters.

Varta Fundamentals Summary

How do Varta's earnings and revenue compare to its market cap?
VAR1 fundamental statistics
Market Cap	€3.24b
Earnings (TTM)	€107.66m
Revenue (TTM)	€895.19m

30.1x

P/E Ratio

3.6x

P/S Ratio

Is VAR1 overvalued?

See Fair Value and valuation analysis

Earnings & Revenue

Key profitability statistics from the latest earnings report
VAR1 income statement (TTM)
Revenue	€895.19m
Cost of Revenue	€335.25m
Gross Profit	€559.94m
Other Expenses	€452.28m
Earnings	€107.66m

Last Reported Earnings

Mar 31, 2022

Next Earnings Date

Aug 11, 2022

Earnings per share (EPS)	2.66
Gross Margin	62.55%
Net Profit Margin	12.03%
Debt/Equity Ratio	0%

How did VAR1 perform over the long term?

See historical performance and comparison

Dividends

3.1%

Current Dividend Yield

93%

Payout Ratio

We’ve recently updated our valuation analysis.

Valuation

Is VAR1 undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

4/6

Valuation Score 4/6

Price-To-Earnings vs Peers
Price-To-Earnings vs Industry
Price-To-Earnings vs Fair Ratio
Below Fair Value
Significantly Below Fair Value
Analyst Forecast

Key Valuation Metric

Which metric is best to use when looking at relative valuation for VAR1?

Other financial metrics that can be useful for relative valuation.

The above table shows the n/a ratio for VAR1. This is calculated by dividing VAR1's market cap by their current preferred multiple.
What is VAR1's n/a Ratio?
n/a Ratio	0x
n/a	n/a
Market Cap	€3.24b

VAR1 key valuation metrics and ratios. From Price to Earnings, Price to Sales and Price to Book to Price to Earnings Growth Ratio, Enterprise Value and EBITDA.
Key Statistics
Enterprise Value/Revenue	3.4x
Enterprise Value/EBITDA	12.6x
PEG Ratio	2.7x

Price to Earnings Ratio vs Peers

How does VAR1's PE Ratio compare to its peers?

VAR1 PE Ratio vs Peers

The above table shows the PE ratio for VAR1 vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
Company	PE	Estimated Growth	Market Cap
Peer Average	32x
SGL SGL Carbon	8.4x	6.7%	€885.2m
CY1K SBF	17.2x	17.9%	€81.5m
EKT Energiekontor	36.7x	15.6%	€1.3b
KU2 KUKA	65.8x	n/a	€3.3b
VAR1 Varta	30.1x	11.0%	€3.2b

Price-To-Earnings vs Peers: VAR1 is good value based on its Price-To-Earnings Ratio (30.1x) compared to the peer average (32x).

Price to Earnings Ratio vs Industry

How does VAR1's PE Ratio compare vs other companies in the European Electrical Industry?

Price-To-Earnings vs Industry: VAR1 is good value based on its Price-To-Earnings Ratio (30.1x) compared to the German Electrical industry average (32.5x)

Price to Earnings Ratio vs Fair Ratio

What is VAR1's PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

VAR1 PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio	30.1x
Fair PE Ratio	24.5x

Price-To-Earnings vs Fair Ratio: VAR1 is expensive based on its Price-To-Earnings Ratio (30.1x) compared to the estimated Fair Price-To-Earnings Ratio (24.5x).

Share Price vs Fair Value

What is the Fair Price of VAR1 when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: VAR1 (€80.18) is trading below our estimate of fair value (€264.76)

Significantly Below Fair Value: VAR1 is trading below fair value by more than 20%.

Analyst Price Targets

What is the analyst 12-month forecast and do we have any statistical confidence in the consensus price target?

Analyst Forecast: Target price is less than 20% higher than the current share price.

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Future Growth

How is Varta forecast to perform in the next 1 to 3 years based on estimates from 7 analysts?

Future Growth Score

3/6

Future Growth Score 3/6

Earnings vs Savings Rate
Earnings vs Market
High Growth Earnings
Revenue vs Market
High Growth Revenue
Future ROE

11.0%

Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts

Analyst Future Growth Forecasts

Earnings vs Savings Rate: VAR1's forecast earnings growth (11% per year) is above the savings rate (-0.01%).

Earnings vs Market: VAR1's earnings (11% per year) are forecast to grow faster than the German market (7.7% per year).

High Growth Earnings: VAR1's earnings are forecast to grow, but not significantly.

Revenue vs Market: VAR1's revenue (12.8% per year) is forecast to grow faster than the German market (4.7% per year).

High Growth Revenue: VAR1's revenue (12.8% per year) is forecast to grow slower than 20% per year.

Earnings per Share Growth Forecasts

Future Return on Equity

Future ROE: VAR1's Return on Equity is forecast to be low in 3 years time (18.5%).

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Past Performance

How has Varta performed over the past 5 years?

Past Performance Score

2/6

Past Performance Score 2/6

Quality Earnings
Growing Profit Margin
Earnings Trend
Accelerating Growth
Earnings vs Industry
High ROE

45.4%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: VAR1 has a high level of non-cash earnings.

Growing Profit Margin: VAR1's current net profit margins (12%) are higher than last year (10.8%).

Past Earnings Growth Analysis

Earnings Trend: VAR1's earnings have grown significantly by 45.4% per year over the past 5 years.

Accelerating Growth: VAR1's earnings growth over the past year (13.1%) is below its 5-year average (45.4% per year).

Earnings vs Industry: VAR1 earnings growth over the past year (13.1%) underperformed the Electrical industry 77.3%.

Return on Equity

High ROE: VAR1's Return on Equity (19.8%) is considered low.

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Financial Health

How is Varta's financial position?

Financial Health Score

6/6

Financial Health Score 6/6

Short Term Liabilities
Long Term Liabilities
Debt Level
Reducing Debt
Debt Coverage
Interest Coverage

Financial Position Analysis

Short Term Liabilities: VAR1's short term assets (€640.4M) exceed its short term liabilities (€412.5M).

Long Term Liabilities: VAR1's short term assets (€640.4M) exceed its long term liabilities (€533.1M).

Debt to Equity History and Analysis

Debt Level: VAR1 is debt free.

Reducing Debt: VAR1 has no debt compared to 5 years ago when its debt to equity ratio was 0%.

Debt Coverage: VAR1 has no debt, therefore it does not need to be covered by operating cash flow.

Interest Coverage: VAR1 has no debt, therefore coverage of interest payments is not a concern.

Balance Sheet

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Dividend

What is Varta current dividend yield, its reliability and sustainability?

Dividend Score

1/6

Dividend Score 1/6

Notable Dividend
High Dividend
Stable Dividend
Growing Dividend
Earnings Coverage
Cash Flow Coverage

3.09%

Current Dividend Yield

Dividend Yield vs Market

Notable Dividend: VAR1's dividend (3.09%) is higher than the bottom 25% of dividend payers in the German market (1.46%).

High Dividend: VAR1's dividend (3.09%) is low compared to the top 25% of dividend payers in the German market (4.4%).

Stability and Growth of Payments

Stable Dividend: Too early to tell whether VAR1's dividend payments have been stable as they only just started paying a dividend.

Growing Dividend: Too early to tell if VAR1's dividend payments are increasing as they only just started paying a dividend.

Earnings Payout to Shareholders

Earnings Coverage: With its high payout ratio (92.9%), VAR1's dividend payments are not well covered by earnings.

Cash Payout to Shareholders

Cash Flow Coverage: VAR1 is paying a dividend but the company has no free cash flows.

Discover strong dividend paying companies

Management

How experienced are the management team and are they aligned to shareholders interests?

1.8yrs

Average management tenure

CEO

Herbert Schein (57 yo)

6.08yrs

Tenure

Mr. Herbert Schein has been the Chairman of the Management Board and Chief Executive Officer at Varta Microbattery GmbH since November 2008 and serves as a Member of Executive Board. Mr. Schein has been Ma...

Leadership Team

Experienced Management: VAR1's management team is not considered experienced ( 1.8 years average tenure), which suggests a new team.

Board Members

Experienced Board: VAR1's board of directors are considered experienced (4.6 years average tenure).

Ownership

Who are the major shareholders and have insiders been buying or selling?

Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.

Data	Last Updated (UTC time)
Company Analysis	2022/08/07 00:00
End of Day Share Price	2022/08/05 00:00
Earnings	2022/03/31
Annual Earnings	2021/12/31