Wavestone (ENXTPA:WAVE) - Share price, News & Analysis

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

WAVE (€51.1) is trading below our estimate of [[fair value]] (€61.85)

WAVE fundamental analysis
Snowflake Score
Valuation	4/6
Future Growth	2/6
Past Performance	5/6
Financial Health	6/6
Dividends	0/6

WAVE Stock Overview

Wavestone SA provides management and digital consulting services primarily in France and internationally.

Rewards

Trading at 17.4% below our estimate of its fair value

Earnings are forecast to grow 4.87% per year

Earnings grew by 101.1% over the past year

Risk Analysis

No risks detected for WAVE from our risk checks.

Wavestone Competitors

Neurones

ENXTPA:NRO

€953.2m

SII

ENXTPA:SII

€1.0b

Aubay Société Anonyme

ENXTPA:AUB

€721.2m

Sword Group

ENXTPA:SWP

€394.8m

Price History & Performance

Summary of all time highs, changes and price drops for Wavestone
Historical stock prices
Current Share Price	€51.10
52 Week High	€55.80
52 Week Low	€39.00
Beta	1.09
1 Month Change	12.56%
3 Month Change	3.86%
1 Year Change	16.14%
3 Year Change	96.54%
5 Year Change	102.60%
Change since IPO	722.12%

Recent News & Updates

Jul 07

If EPS Growth Is Important To You, Wavestone (EPA:WAVE) Presents An Opportunity

The excitement of investing in a company that can reverse its fortunes is a big draw for some speculators, so even...

Jun 13

Wavestone (EPA:WAVE) Could Easily Take On More Debt

Some say volatility, rather than debt, is the best way to think about risk as an investor, but Warren Buffett famously...

Jun 01

At €49.65, Is It Time To Put Wavestone SA (EPA:WAVE) On Your Watch List?

While Wavestone SA ( EPA:WAVE ) might not be the most widely known stock at the moment, it received a lot of attention...

Shareholder Returns

	WAVE	FR IT	FR Market
7D	-0.8%	1.2%	1.3%
1Y	16.1%	-17.2%	-6.4%

Return vs Industry: WAVE exceeded the French IT industry which returned -17.2% over the past year.

Return vs Market: WAVE exceeded the French Market which returned -6.4% over the past year.

Price Volatility

Is WAVE's price volatile compared to industry and market?
WAVE volatility
WAVE Average Weekly Movement	5.3%
IT Industry Average Movement	4.8%
Market Average Movement	4.9%
10% most volatile stocks in FR Market	9.1%
10% least volatile stocks in FR Market	2.9%

Stable Share Price: WAVE is not significantly more volatile than the rest of French stocks over the past 3 months, typically moving +/- 5% a week.

Volatility Over Time: WAVE's weekly volatility (5%) has been stable over the past year.

About the Company

Founded	Employees	CEO	Website
1990	3,732	Pascal Imbert	https://www.wavestone.com/en/

Wavestone SA provides management and digital consulting services primarily in France and internationally. It offers consulting services in the areas of finance, telecom, media and entertainment, consumer goods and retail, manufacturing, energy and utilities, transportation and travel, real estate, public sector, and international institutions. The company was formerly known as Solucom SA and changed its name to Wavestone SA in July 2016.

Wavestone Fundamentals Summary

How do Wavestone's earnings and revenue compare to its market cap?
WAVE fundamental statistics
Market Cap	€1.02b
Earnings (TTM)	€51.03m
Revenue (TTM)	€470.06m

20.0x

P/E Ratio

2.2x

P/S Ratio

Is WAVE overvalued?

See Fair Value and valuation analysis

Earnings & Revenue

Key profitability statistics from the latest earnings report
WAVE income statement (TTM)
Revenue	€470.06m
Cost of Revenue	€347.21m
Gross Profit	€122.85m
Other Expenses	€71.82m
Earnings	€51.03m

Last Reported Earnings

Mar 31, 2022

Next Earnings Date

n/a

Earnings per share (EPS)	2.55
Gross Margin	26.14%
Net Profit Margin	10.86%
Debt/Equity Ratio	18.6%

How did WAVE perform over the long term?

See historical performance and comparison

Dividends

0.7%

Current Dividend Yield

15%

Payout Ratio

We’ve recently updated our valuation analysis.

Valuation

Is WAVE 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 WAVE?

Other financial metrics that can be useful for relative valuation.

The above table shows the n/a ratio for WAVE. This is calculated by dividing WAVE's market cap by their current preferred multiple.
What is WAVE's n/a Ratio?
n/a Ratio	0x
n/a	n/a
Market Cap	€1.02b

WAVE 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	2.1x
Enterprise Value/EBITDA	11.8x
PEG Ratio	4.1x

Price to Earnings Ratio vs Peers

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

WAVE PE Ratio vs Peers

The above table shows the PE ratio for WAVE vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
Company	PE	Estimated Growth	Market Cap
Peer Average	21.4x
NRO Neurones	25.3x	12.9%	€953.2m
SII SII	16.9x	7.2%	€1.0b
AUB Aubay Société Anonyme	21x	7.3%	€721.2m
SWP Sword Group	22.4x	-16.8%	€394.8m
WAVE Wavestone	20x	4.9%	€1.0b

Price-To-Earnings vs Peers: WAVE is good value based on its Price-To-Earnings Ratio (20x) compared to the peer average (21.4x).

Price to Earnings Ratio vs Industry

How does WAVE's PE Ratio compare vs other companies in the FR IT Industry?

Price-To-Earnings vs Industry: WAVE is good value based on its Price-To-Earnings Ratio (20x) compared to the French IT industry average (22.1x)

Price to Earnings Ratio vs Fair Ratio

What is WAVE'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.

WAVE PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio	20x
Fair PE Ratio	25x

Price-To-Earnings vs Fair Ratio: WAVE is good value based on its Price-To-Earnings Ratio (20x) compared to the estimated Fair Price-To-Earnings Ratio (25x).

Share Price vs Fair Value

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

Below Fair Value: WAVE (€51.1) is trading below our estimate of fair value (€61.85)

Significantly Below Fair Value: WAVE is trading below fair value, but not by a significant amount.

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 Wavestone forecast to perform in the next 1 to 3 years based on estimates from 3 analysts?

Future Growth Score

2/6

Future Growth Score 2/6

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

4.9%

Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts

Analyst Future Growth Forecasts

Earnings vs Savings Rate: WAVE's forecast earnings growth (4.9% per year) is above the savings rate (0.3%).

Earnings vs Market: WAVE's earnings (4.9% per year) are forecast to grow slower than the French market (11.5% per year).

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

Revenue vs Market: WAVE's revenue (6.4% per year) is forecast to grow faster than the French market (5.2% per year).

High Growth Revenue: WAVE's revenue (6.4% per year) is forecast to grow slower than 20% per year.

Earnings per Share Growth Forecasts

Future Return on Equity

Future ROE: WAVE's Return on Equity is forecast to be low in 3 years time (15.3%).

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Past Performance

How has Wavestone performed over the past 5 years?

Past Performance Score

5/6

Past Performance Score 5/6

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

12.4%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: WAVE has high quality earnings.

Growing Profit Margin: WAVE's current net profit margins (10.9%) are higher than last year (6.1%).

Past Earnings Growth Analysis

Earnings Trend: WAVE's earnings have grown by 12.4% per year over the past 5 years.

Accelerating Growth: WAVE's earnings growth over the past year (101.1%) exceeds its 5-year average (12.4% per year).

Earnings vs Industry: WAVE earnings growth over the past year (101.1%) exceeded the IT industry 31.7%.

Return on Equity

High ROE: WAVE's Return on Equity (19.9%) is considered low.

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Financial Health

How is Wavestone'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: WAVE's short term assets (€279.4M) exceed its short term liabilities (€169.7M).

Long Term Liabilities: WAVE's short term assets (€279.4M) exceed its long term liabilities (€67.5M).

Debt to Equity History and Analysis

Debt Level: WAVE has more cash than its total debt.

Reducing Debt: WAVE's debt to equity ratio has reduced from 89% to 18.6% over the past 5 years.

Debt Coverage: WAVE's debt is well covered by operating cash flow (117.6%).

Interest Coverage: WAVE's interest payments on its debt are well covered by EBIT (89.7x coverage).

Balance Sheet

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Dividend

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

Dividend Score

0/6

Dividend Score 0/6

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

0.74%

Current Dividend Yield

Dividend Yield vs Market

Notable Dividend: WAVE's dividend (0.74%) isn’t notable compared to the bottom 25% of dividend payers in the French market (1.68%).

High Dividend: WAVE's dividend (0.74%) is low compared to the top 25% of dividend payers in the French market (5.25%).

Stability and Growth of Payments

Stable Dividend: WAVE is not paying a notable dividend for the French market, therefore no need to check if payments are stable.

Growing Dividend: WAVE is not paying a notable dividend for the French market, therefore no need to check if payments are increasing.

Earnings Payout to Shareholders

Earnings Coverage: WAVE is not paying a notable dividend for the French market.

Cash Payout to Shareholders

Cash Flow Coverage: WAVE is not paying a notable dividend for the French market.

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Management

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

11.6yrs

Average management tenure

CEO

Pascal Imbert (64 yo)

19.92yrs

Tenure

€300,129

Compensation

Mr. Pascal Imbert has been Chairman of the Management Board at Wavestone SA (also known as Solucom SA) since September 26, 2012 and has been its Member of the Management Board since September 30, 2002. Mr....

CEO Compensation Analysis

Compensation vs Market: Pascal's total compensation ($USD307.73K) is below average for companies of similar size in the French market ($USD610.54K).

Compensation vs Earnings: Pascal's compensation has increased by more than 20% in the past year.

Leadership Team

Experienced Management: WAVE's management team is seasoned and experienced (11.6 years average tenure).

Board Members

Experienced Board: WAVE'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	2022/08/13 00:00
End of Day Share Price	2022/08/12 00:00
Earnings	2022/03/31
Annual Earnings	2022/03/31