Original-Research: q.beyond AG (von NuWays AG): Buy

Original-Research: q.beyond AG - from NuWays AG

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27.01.2025 / 09:01 CET/CEST

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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: 27.01.2025

Target price: EUR 1.10

Target price on sight of: 12 months

Last rating change:

Analyst: Philipp Sennewald

Profitable growth ahead after transitionary FY24e

After a rather uninspiring operating performance in FY23, FY24e is seen to

have already benefited significantly from the imposed efficiency measures,

leading to substantial bottom-line improvements. In fact, EBITDA is seen to

improve by a whopping 286% to EUR 9.3m (FY23 EBITDA adjusted for positive

effects in connection with favorable decisions by tax authorities) on the

back of an improved nearand off-shore ratio as well as a higher utilization

in the consulting segment.

That being said, like in the previous year the company is expected to

release preliminary FY figures in early March (final: 31st March), as well

as an initial guidance for FY25e. As management repeatedly stated, we expect

the outlook to target continued FCF expansions (eNuW: EUR 9.8m) as well as

positive net income (eNuW: EUR 2.1m) alongside mid-SD sales growth (eNuW:

+5.9%). Besides this, the company already provided an EBTIDA margin target

of 7-8% (eNuW: 7.1%) for FY25e.

The main driver behind the continuous margin expansion should be the ongoing

implementation of one.q.beyond as well as the Strategy 2025, with which

management is setting three strategic priorities. (1) Ongoing focus on key

verticals (retail, logistics, manufacturing) coupled with an increased focus

on consulting and development, which in the end facilitates gaining new

orders for operations. (2) Further increasing the near- and off-shoring

ratio to 20+% (Q3'24: 13%, mid-term target: 30+%), allowing for gross margin

expansion. According to the rule of thumb, a 5pp increase in near- and

off-shoring leads to a 1pp increase of the gross margin. (3) Higher emphasis

on AI in all business areas (1st level service, development & resource

planning) allowing for a reduced fixed cost base.

While some off those measures already borne fruit, visible in the improved

profitability and cash generation in FY24e, we expect further efficiency

potential to unfold from 2025e onwards, which should allow for EBITDA

margins of 10+% in the mid-term (eNuW).

In addition, we expect the company to close at least one acquisition in

FY25e based on management's indications as well as the strong net cash

position of EUR 36m. Here, it seems likely that management targets to enter

new verticals (i.e. public sector, energy, healthcare) or regional markets.

In our view, targets should be in the range of EUR 10-20m sales as well as

cash generative. Mind you, future M&A is not reflected in our model and is

thus providing upside to our estimates.

That said, the investment case remains fully intact as operations are set to

further improve going forward. Moreover, trading at only 3.1x EV/EBITDA

FY25e, the stock looks undoubtedly cheap. We hence reiterate BUY with an

unchanged EUR 1.10 PT based on DCF.

You can download the research here: http://www.more-ir.de/d/31661.pdf

For additional information visit our website:

https://www.nuways-ag.com/research-feed

Contact for questions:

NuWays AG - Equity Research

Web: www.nuways-ag.com

Email: [email protected]

LinkedIn: https://www.linkedin.com/company/nuwaysag

Adresse: Mittelweg 16-17, 20148 Hamburg, Germany

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Diese Meldung ist keine Anlageberatung oder Aufforderung zum Abschluss

bestimmter Börsengeschäfte.

Offenlegung möglicher Interessenskonflikte nach § 85 WpHG beim oben

analysierten Unternehmen befinden sich in der vollständigen Analyse.

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2074777 27.01.2025 CET/CEST

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Quelle: dpa-AFX