eo Networks (WSE:EON) - Share price, News & Analysis

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

EON (PLN17.6) is trading above our estimate of [[fair value]] (PLN8.93)

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

EON Stock Overview

eo Networks S.A. engages in the creation and maintenance of software solutions to corporate and public sector customers in Poland and the European Union.

Rewards

Price-To-Earnings ratio (9.2x) is below the Polish market (9.8x)

Earnings grew by 87.5% over the past year

Risk Analysis

Does not have a meaningful market cap (PLN32M)

Volatile share price over the past 3 months

Large one-off items impacting financial results

eo Networks Competitors

Optigis

WSE:OPI

zł34.6m

Brand 24

WSE:B24

zł49.2m

Edison

WSE:EDN

zł12.7m

M4B

WSE:M4B

zł126.1m

Price History & Performance

Summary of all time highs, changes and price drops for eo Networks
Historical stock prices
Current Share Price	zł17.60
52 Week High	zł25.00
52 Week Low	zł13.00
Beta	1.0
1 Month Change	1.15%
3 Month Change	-2.22%
1 Year Change	-5.38%
3 Year Change	198.31%
5 Year Change	225.93%
Change since IPO	-6.88%

Shareholder Returns

	EON	PL Software	PL Market
7D	3.5%	3.8%	2.4%
1Y	-5.4%	-14.7%	-20.9%

Return vs Industry: EON exceeded the Polish Software industry which returned -15.2% over the past year.

Return vs Market: EON exceeded the Polish Market which returned -20.7% over the past year.

Price Volatility

Is EON's price volatile compared to industry and market?
EON volatility
EON Average Weekly Movement	9.0%
Software Industry Average Movement	6.2%
Market Average Movement	6.4%
10% most volatile stocks in PL Market	12.1%
10% least volatile stocks in PL Market	4.2%

Stable Share Price: EON is more volatile than 75% of Polish stocks over the past 3 months, typically moving +/- 9% a week.

Volatility Over Time: EON's weekly volatility (9%) has been stable over the past year, but is still higher than 75% of Polish stocks.

About the Company

Founded	Employees	CEO	Website
2001	143	Blazej Piech	https://www.eo.pl

eo Networks S.A. engages in the creation and maintenance of software solutions to corporate and public sector customers in Poland and the European Union. The company develops Web, desktop, and mobile application, which cover front-end systems, information portals, knowledge bases, self-care portals, customer relationship management systems, intranets, process automation, back office applications, and domain-specific portals; and B2B and B2C systems. It also provides design and system integration services; quality assurance and testing services; outsourcing services for technological support for various projects; system maintenance services, such as incident management, system improvement, system monitoring, second and third line support, single point of contact, and system operation; infrastructure maintenance services, including hosting, colocation, virtualization, monitoring, infrastructure administration, and network management; and maintenance services for existing systems.

eo Networks Fundamentals Summary

How do eo Networks's earnings and revenue compare to its market cap?
EON fundamental statistics
Market Cap	zł32.35m
Earnings (TTM)	zł3.53m
Revenue (TTM)	zł48.33m

9.2x

P/E Ratio

0.7x

P/S Ratio

Is EON overvalued?

See Fair Value and valuation analysis

Earnings & Revenue

Key profitability statistics from the latest earnings report
EON income statement (TTM)
Revenue	zł48.33m
Cost of Revenue	zł39.01m
Gross Profit	zł9.32m
Other Expenses	zł5.79m
Earnings	zł3.53m

Last Reported Earnings

Mar 31, 2022

Next Earnings Date

Nov 14, 2022

Earnings per share (EPS)	1.92
Gross Margin	19.29%
Net Profit Margin	7.31%
Debt/Equity Ratio	1.2%

How did EON perform over the long term?

See historical performance and comparison

Dividends

2.1%

Current Dividend Yield

19%

Payout Ratio

We’ve recently updated our valuation analysis.

Valuation

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

Valuation Score

2/6

Valuation Score 2/6

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 EON?

Other financial metrics that can be useful for relative valuation.

The above table shows the n/a ratio for EON. This is calculated by dividing EON's market cap by their current preferred multiple.
What is EON's n/a Ratio?
n/a Ratio	0x
n/a	n/a
Market Cap	zł32.35m

EON 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	0.5x
Enterprise Value/EBITDA	6.2x
PEG Ratio	n/a

Price to Earnings Ratio vs Peers

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

EON PE Ratio vs Peers

The above table shows the PE ratio for EON vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
Company	PE	Estimated Growth	Market Cap
Peer Average	32.8x
OPI Optigis	17.7x	n/a	zł34.6m
B24 Brand 24	70.5x	n/a	zł49.2m
EDN Edison	12x	n/a	zł12.7m
M4B M4B	36x	n/a	zł126.1m
EON eo Networks	9.2x	n/a	zł32.4m

Price-To-Earnings vs Peers: EON is good value based on its Price-To-Earnings Ratio (9.2x) compared to the peer average (32.8x).

Price to Earnings Ratio vs Industry

How does EON's PE Ratio compare vs other companies in the PL Software Industry?

Price-To-Earnings vs Industry: EON is good value based on its Price-To-Earnings Ratio (9.2x) compared to the Polish Software industry average (18.3x)

Price to Earnings Ratio vs Fair Ratio

What is EON'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.

EON PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio	9.2x
Fair PE Ratio	n/a

Price-To-Earnings vs Fair Ratio: Insufficient data to calculate EON's Price-To-Earnings Fair Ratio for valuation analysis.

Share Price vs Fair Value

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

Below Fair Value: EON (PLN17.6) is trading above our estimate of fair value (PLN8.93)

Significantly Below Fair Value: EON is trading above our estimate of fair value.

Analyst Price Targets

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

Analyst Forecast: Insufficient data to show price forecast.

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Future Growth

How is eo Networks forecast to perform in the next 1 to 3 years based on estimates from 0 analysts?

Future Growth Score

0/6

Future Growth Score 0/6

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

25.7%

Forecasted Software industry annual growth in earnings

In this section we usually present revenue and earnings growth projections based on the consensus estimates of professional analysts to help investors understand the company’s ability to generate profit. But as eo Networks has not provided enough past data and has no analyst forecast, its future earnings cannot be reliably calculated by extrapolating past data or using analyst predictions.

This is quite a rare situation as 97% of companies covered by SimplyWall St do have past financial data.

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Check out eo Networks's track record over time to understand how much the company has returned to shareholders and its earnings growth rate in the past.
eo Networks competitive advantages and company strategy can generally be found in its financial reports archived here.

Past Performance

How has eo Networks performed over the past 5 years?

Past Performance Score

4/6

Past Performance Score 4/6

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

7.0%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: EON has a large one-off gain of PLN1.2M impacting its March 31 2022 financial results.

Growing Profit Margin: EON's current net profit margins (7.3%) are higher than last year (4.5%).

Past Earnings Growth Analysis

Earnings Trend: EON's earnings have grown by 7% per year over the past 5 years.

Accelerating Growth: EON's earnings growth over the past year (87.5%) exceeds its 5-year average (7% per year).

Earnings vs Industry: EON earnings growth over the past year (87.5%) exceeded the Software industry 13.1%.

Return on Equity

High ROE: EON's Return on Equity (11.4%) is considered low.

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Financial Health

How is eo Networks's financial position?

Financial Health Score

5/6

Financial Health Score 5/6

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

Financial Position Analysis

Short Term Liabilities: EON's short term assets (PLN19.0M) exceed its short term liabilities (PLN7.1M).

Long Term Liabilities: EON's short term assets (PLN19.0M) exceed its long term liabilities (PLN2.1M).

Debt to Equity History and Analysis

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

Reducing Debt: Insufficient data to determine if EON's debt to equity ratio has reduced over the past 5 years.

Debt Coverage: EON's debt is well covered by operating cash flow (812.5%).

Interest Coverage: EON earns more interest than it pays, so coverage of interest payments is not a concern.

Balance Sheet

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Dividend

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

Dividend Score

2/6

Dividend Score 2/6

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

2.10%

Current Dividend Yield

Dividend Yield vs Market

Notable Dividend: EON's dividend (2.1%) isn’t notable compared to the bottom 25% of dividend payers in the Polish market (2.71%).

High Dividend: EON's dividend (2.1%) is low compared to the top 25% of dividend payers in the Polish market (8.79%).

Stability and Growth of Payments

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

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

Earnings Payout to Shareholders

Earnings Coverage: With its low payout ratio (19.2%), EON's dividend payments are well covered by earnings.

Cash Payout to Shareholders

Cash Flow Coverage: With its low cash payout ratio (24.5%), EON's dividend payments are well covered by cash flows.

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Management

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

1.6yrs

Average board tenure

CEO

Blazej Piech

9.25yrs

Tenure

Mr. Blazej Piech has been Chairman of Management Board at eo Networks Spólka Akcyjna since May 15, 2013. Mr. Piech served as a Vice President of Management Board at eo Networks Spólka Akcyjna from 2009 to...

Board Members

Experienced Board: EON's board of directors are not considered experienced ( 1.6 years average tenure), which suggests a new board.

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	2022/08/16 00:00
End of Day Share Price	2022/08/16 00:00
Earnings	2022/03/31
Annual Earnings	2021/12/31