Cancom Stock: Mixed Results Push Shares Lower

Cancom SE, the IT services provider, delivered a mixed performance for the fiscal year 2024, with revenue climbing significantly by 14 percent to €1.74 billion, nearly reaching the upper end of its forecast range. However, profitability fell short of expectations as earnings before interest, taxes, depreciation, and amortization (EBITDA) declined by over two percent to €113.1 million, landing at the lower end of the company's revised November guidance. The gross profit showed a notable increase of 19.1 percent, reaching €693.3 million. A particularly bright spot emerged in operational cash flow, which more than doubled to €192.9 million, marking a new record.

Market Response and Outlook

The market reacted negatively to these results, with Cancom's shares dropping 2.85 percent to €24.58 in XETRA trading. The company's performance was significantly impacted by challenges in the public sector, traditionally a key customer segment, due to budget constraints and political uncertainties. Additionally, the general economic weakness across Germany and Europe affected demand from medium-sized businesses. Analysts have set an average price target of €29.20 per share, with expectations of a slight dividend increase from €1.00 to €1.01 per share for the current year.