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Original-Research: q.beyond AG - from NuWays AG
Classification of NuWays AG to q.beyond AG
Company Name: q.beyond AG
ISIN: DE0005137004
Reason for the research: Update
Recommendation: Kaufen
from: 07.05.2024
Target price: EUR 1.00
Target price on sight of: 12 Monaten
Last rating change:
Analyst: Philipp Sennewald
Q1 figures set to display operational improvements / chg.
q.beyond's Q1 figures, which will be released on May 13th, are seen to
provide investors with confidence
regarding the company's outlook. While top-line growth is expected to come
in rather muted, the imposed efficiency measures should already become
visible on the bottom-line.
Q1 sales look set to increase by 2% yoy to EUR 47.5m (eNuW). Compared to the
previous year, q.beyond will report under a new segmentation, comprising
the two segments Managed Services (2023: EUR 129m sales) and Consulting (EUR
60.3m). While overall sales growth is seen to remain muted throughout the
year, we expect the company to also benefit from the general acceleration
of the SAP S/4HANA transformation. Just recently, the company announced to
have completed another conversion project with regional newspaper Neue
Westfälische. Mind you, SAP ERP customers are getting more and more under
pressure regarding the transformation, as SAP will fade out mainstream
maintenance for the old ECC by the end of 2027.
EBITDA in Q1 is seen to improve strongly to EUR 1.4m (eNuW), up from EUR -1.3m
in Q1 '23. Main drivers for the improved profitability should be an
increased near- and off-shoring ratio, which management is aiming to lift
from 11% in 2023 to 20% by 2025. This alone should allow for a gross margin
improvement of c. 2pp (eNuW). Moreover, we expect an increased focus on the
consulting and development business, where gross margins of >20% should be
well achievable driven by increased daily rates.
With this, q.beyond should be on track to achieve its full year guidance.
While the sales outlook looks conservative with implied 3.0% yoy growth at
mid-point (eNuW: 3.1% yoy) the company looks set to achieve at least the
lower end of the EBITDA guidance of EUR 8-10m (eNuW: EUR 8.2m) as we expect
gradual profitability improvements driven by the aforementioned effects
throughout the year.
Besides this, inorganic growth might become a factor towards YE, as implied
by CEO Rixen in the call for the FY prelims. In fact, with more than EUR 30m
net cash the company looks well equipped to tap the M&A market again. Here,
one possibility could be to partner up with a company from a respective
industry in order to access new verticals, comparably to logineer.
q.beyond remains a BUY with an unchanged PT of EUR 1.00 based on DCF.
You can download the research here:
http://www.more-ir.de/d/29617.pdf
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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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The result of this research does not constitute investment advice
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