DB:ADN1

Stock Analysis Report

Executive Summary

adesso AG operates as an IT service provider focusing on consulting and software development in Germany, Austria, Switzerland, and internationally.

Rewards

Trading at 57.1% below its fair value

Earnings are forecast to grow 28.77% per year

Pays a reliable dividend of 1.05%

Risk Analysis

Debt is not well covered by operating cash flow

High level of non-cash earnings

Highly volatile share price over past 3 months

Latest financial reports are more than 6 months old



Snowflake Analysis

Undervalued with reasonable growth potential and pays a dividend.

Share Price & News

How has adesso's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: ADN1's share price has been volatile over the past 3 months.


Market Performance


7 Day Return

8.6%

ADN1

3.4%

DE IT

2.2%

DE Market


1 Year Return

-17.6%

ADN1

4.4%

DE IT

-17.2%

DE Market

Return vs Industry: ADN1 underperformed the German IT industry which returned 4.4% over the past year.

Return vs Market: ADN1 matched the German Market which returned -17.2% over the past year.


Shareholder returns

ADN1IndustryMarket
7 Day8.6%3.4%2.2%
30 Day-21.1%-9.2%-15.7%
90 Day-18.3%-10.4%-24.0%
1 Year-16.9%-17.6%5.1%4.4%-14.9%-17.2%
3 Year-13.5%-15.4%81.5%76.0%-16.4%-23.3%
5 Year206.4%192.0%167.3%156.0%-16.5%-27.8%

Price Volatility Vs. Market

How volatile is adesso's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is adesso undervalued compared to its fair value and its price relative to the market?

>50%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: ADN1 (€43.4) is trading below our estimate of fair value (€101.18)

Significantly Below Fair Value: ADN1 is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: ADN1 is good value based on its PE Ratio (22.2x) compared to the IT industry average (26.8x).

PE vs Market: ADN1 is poor value based on its PE Ratio (22.2x) compared to the German market (16.8x).


Price to Earnings Growth Ratio

PEG Ratio: ADN1 is good value based on its PEG Ratio (0.8x)


Price to Book Ratio

PB vs Industry: ADN1 is good value based on its PB Ratio (3.3x) compared to the DE IT industry average (3.3x).


Next Steps

Future Growth

How is adesso forecast to perform in the next 1 to 3 years based on estimates from 2 analysts?

28.8%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: ADN1's forecast earnings growth (28.8% per year) is above the savings rate (-0.4%).

Earnings vs Market: ADN1's earnings (28.8% per year) are forecast to grow faster than the German market (14.5% per year).

High Growth Earnings: earnings are expected to grow significantly over the next 3 years.

Revenue vs Market: ADN1's revenue (8.2% per year) is forecast to grow faster than the German market (4.1% per year).

High Growth Revenue: ADN1's revenue (8.2% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: ADN1's Return on Equity is forecast to be low in 3 years time (19.6%).


Next Steps

Past Performance

How has adesso performed over the past 5 years?

29.0%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: ADN1 has a high level of non-cash earnings.

Growing Profit Margin: ADN1's current net profit margins (2.9%) are lower than last year (4.1%).


Past Earnings Growth Analysis

Earnings Trend: ADN1's earnings have grown significantly by 29% per year over the past 5 years.

Accelerating Growth: ADN1's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: ADN1 had negative earnings growth (-16.7%) over the past year, making it difficult to compare to the IT industry average (2.5%).


Return on Equity

High ROE: ADN1's Return on Equity (15%) is considered low.


Next Steps

Financial Health

How is adesso's financial position?


Financial Position Analysis

Short Term Liabilities: ADN1's short term assets (€155.9M) exceed its short term liabilities (€115.0M).

Long Term Liabilities: ADN1's short term assets (€155.9M) exceed its long term liabilities (€122.5M).


Debt to Equity History and Analysis

Debt Level: ADN1's debt to equity ratio (78.9%) is considered high.

Reducing Debt: ADN1's debt to equity ratio has increased from 12.3% to 78.9% over the past 5 years.

Debt Coverage: ADN1's debt is not well covered by operating cash flow (2.6%).

Interest Coverage: ADN1's interest payments on its debt are well covered by EBIT (16x coverage).


Balance Sheet

Inventory Level: ADN1 has a high level of physical assets or inventory.

Debt Coverage by Assets: ADN1's debt is covered by short term assets (assets are 2.5x debt).


Next Steps

Dividend

What is adesso's current dividend yield, its reliability and sustainability?

1.05%

Current Dividend Yield


Upcoming Dividend Payment


Dividend Yield vs Market

Notable Dividend: ADN1's dividend (1.05%) isn’t notable compared to the bottom 25% of dividend payers in the German market (1.65%).

High Dividend: ADN1's dividend (1.05%) is low compared to the top 25% of dividend payers in the German market (4.87%).


Stability and Growth of Payments

Stable Dividend: ADN1's dividends per share have been stable in the past 10 years.

Growing Dividend: ADN1's dividend payments have increased over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: With its low payout ratio (23.3%), ADN1's dividend payments are well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: ADN1's dividends in 3 years are forecast to be thoroughly covered by earnings (14% payout ratio).


Next Steps

Management

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

4.9yrs

Average management tenure


CEO

Michael Kenfenheuer (61yo)

9.17s

Tenure

€739,000

Compensation

Mr. Michael Kenfenheuer has been the Chairman of the Executive Board at adesso AG. since July 1, 2015. Mr. Kenfenheuer served as the Chief Financial Officer at adesso AG and has been its Chief Executive Of ...


CEO Compensation Analysis

Compensation vs Market: Michael's total compensation ($USD812.09K) is about average for companies of similar size in the German market ($USD701.62K).

Compensation vs Earnings: Michael's compensation has been consistent with company performance over the past year.


Leadership Team

NamePositionTenureCompensationOwnership
Volker Gruhn
Co-Founder & Chairperson of the Supervisory Board13.67yrs€8.00k27.85% 73.7m
Michael Kenfenheuer
Chairman of the Executive Board & CEO9.17yrs€739.00k0.42% 1.1m
Rainer Rudolf
Co-Founder & Member of the Supervisory Board6.67yrs€5.00k17.62% 46.6m
Andreas Prenneis
MD & Member of Executive Board4.92yrs€429.00kno data
Dirk Pothen
Member of Executive Board1.42yrs€254.00kno data
Jörg Schroeder
CFO & Member of Executive board0.50yrno datano data
Stefan Riedel
Member of Executive Board0.17yrno datano data
Martin Möllmann
Manager of Investor Relationsno datano datano data
Rüdiger Striemer
Chief Marketing Officerno data€452.00kno data
Thomas Franz
Head of Technology Advisory Boardno datano datano data

4.9yrs

Average Tenure

54yo

Average Age

Experienced Management: ADN1's management team is considered experienced (4.9 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Volker Gruhn
Co-Founder & Chairperson of the Supervisory Board13.67yrs€8.00k27.85% 73.7m
Rainer Rudolf
Co-Founder & Member of the Supervisory Board6.67yrs€5.00k17.62% 46.6m
Friedrich Wöbking
Member of the Supervisory Board9.75yrs€9.00k0.11% 299.9k
Heinz-Werner Richter
Member of the Supervisory Board6.67yrs€10.00kno data
Hermann Kögler
Member of the Supervisory Board4.75yrs€10.00kno data
Gottfried Koch
Member of the Supervisory Board6.67yrs€9.00k0.26% 682.2k

6.7yrs

Average Tenure

66yo

Average Age

Experienced Board: ADN1's board of directors are considered experienced (6.7 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.


Top Shareholders

Company Information

adesso AG's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: adesso AG
  • Ticker: ADN1
  • Exchange: DB
  • Founded: 1997
  • Industry: IT Consulting and Other Services
  • Sector: Software
  • Market Cap: €264.646m
  • Shares outstanding: 6.18m
  • Website: https://www.adesso.de

Number of Employees


Location

  • adesso AG
  • Adessoplatz 1
  • Dortmund
  • North Rhine-Westphalia
  • 44269
  • Germany

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
ADN1DB (Deutsche Boerse AG)YesCommon StockDEEURSep 2007
ADN1XTRA (XETRA Trading Platform)YesCommon StockDEEURSep 2007
0N5ILSE (London Stock Exchange)YesCommon StockGBEURSep 2007
ADN1DBATS-CHIXE (BATS 'Chi-X Europe')YesCommon StockGBEURSep 2007
ADN1ETLX (Eurotlx)YesCommon StockITEURSep 2007

Biography

adesso AG operates as an IT service provider focusing on consulting and software development in Germany, Austria, Switzerland, and internationally. It operates through IT-Services and IT-Solutions segments. The company offers IT consulting, software development, and IT management services. It serves automotive, banks/financial services, utilities, healthcare, retail, lottery, mechanical engineering, Exhibition Corporation, public authorities, public transportation, media/ publishing, and insurance industries. The company was founded in 1997 and is headquartered in Dortmund, Germany. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/04/01 00:41
End of Day Share Price2020/03/31 00:00
Earnings2019/06/30
Annual Earnings2018/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.