Tinexta - Weak Q324 but valuation appears too pessimistic

Tinexta's weak Q324 results from its Cyber Security (CS) and Business Innovation (BI) divisions have prompted management to downgrade financial guidance for FY24 for the second time this year. We also take a more cautious stance on expected growth in FY25 and FY26. The c 60% decline in the share price in 2024, versus cumulative underlying downgrades of 16% to FY24e adjusted EBITDA, reflects investor concerns about two of Tinexta's most significant acquisitions in recent years, the CS division and ABF Groupe. An improvement in performance from either would be helpful for sentiment, which appears overly pessimistic.

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