Original-Research: q.beyond AG - from NuWays AG
12.11.2024 / 09:02 CET/CEST
Dissemination of a Research, transmitted by EQS News - a service of EQS Group AG.
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Classification of NuWays AG to q.beyond AG
Company Name: q.beyond AG
ISIN: DE0005137004
Reason for the research: Update
Recommendation: Buy
from: 12.11.2024
Target price: EUR 1.10
Target price on sight of: 12 months
Last rating change:
Analyst: Philipp Sennewald
Q3 in line with est.; consulting on the road to recovery
Topic: QBY released Q3 results that were largely in line with our estimates on the top- and bottom-line. Especially profitability remains on a strongly improved level compared to the previous year. In detail:
Q3 sales increased 3.5% yoy to EUR 47.0m (eNuW: EUR 47.3m; eCons: EUR 47.4m), again driven by the managed service segment but also a sequential improvement of the consulting segment. Managed service sales increased 6.2% yoy to EUR 32.9m (eNuW: EUR 32.8m) and achieved an improved segment gross margin of 79.9% (+1pp yoy). On the other hand, the consulting segment saw a further decline, as sales were down 2.6% yoy to EUR 14.1m (eNuW: EUR 14.5m). Yet, we saw a sequential improvement of 4.2% qoq, which is pointing towards a recovery, in our view, as the segment gross margin also improved slightly by 0.4pp qoq to 7.1%. Mind you, management targets to substantially increase the consulting margin going forward, driven by an increased utilization as well as a higher near- and off-shoring ratio (target: 20%; 13% at Q3 '24). Overall gross profit came in at EUR 7.6m (eNuW: EUR 7.8m; eCons: EUR 8.4m, implying a margin of 16.2% (+0.9pp yoy).
Against this backdrop, Q3 EBITDA improved significantly to EUR 2.2m (vs. EUR -0.1m in Q3 '23; eNuW: EUR 2.2m; eCons: EUR 2.3m), implying a 4.6% margin. The drivers behind the improvement were significant reductions in sales & marketing (-14% yoy) as well as G&A expenses (-12% yoy) following the successful implementation of the One q.beyond strategy.
On this basis, management confirmed the FY guidance of EUR 192-198m (eNuW: EUR 193m; eCons: EUR 193m), EBITDA of EUR 8-10m (eNuW: EUR 9.3m; eCons: EUR 9.2m) as well as positive FCF (eNuW: EUR 5.6m; eCons: EUR 4.4m). In our view, the guidance looks absolutely achievable, especially given the seasonally strong Q4 ahead. At 9M, FCF arrived at EUR 4.7m, which compares to EUR 2.6m in the same period last year.
Overall, the release fully underpins the case in accordance with management's Strategy 2025, targeting an EBTIDA margin of 7-8% (eNuW: 7.1%; eCons: 6.8%) as well as sustained positive net income (eNuW: EUR 2.1m; eCons: EUR 1.4m).
Reiterate BUY with an unchanged EUR 1.10 PT based on DCF.
You can download the research here: http://www.more-ir.de/d/31277.pdf For additional information visit our website: www.nuways-ag.com/research
Contact for questions:
NuWays AG - Equity Research
Web: www.nuways-ag.com
Email: research@nuways-ag.com
LinkedIn: https://www.linkedin.com/company/nuwaysag
Adresse: Mittelweg 16-17, 20148 Hamburg, Germany
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