London, UK, 24 June 2022
EQS Group (EQS): Regulatory stimulus set for H222
EQS is in a strong position to build its client base as the EU whistleblowing directive comes into force across Europe. Delays in adoption of formal legislation are a frustration but do not detract from the strength of the underlying proposition. EQS retains its ambition to be the leading European cloud provider for global investor relations and corporate compliance solutions by 2025. The €45m raised in March will help fund the repayment of short-term bank and vendor loans during Q222. We see management’s targets of €130m of group revenues and EBITDA margins of at least 30% for FY25 as demanding but achievable.
EQS’s share price has retreated by 35% since the start of the year, while financial B2B company valuations have fallen by 32% and those of application software companies by the same percentage. Profitability is currently subdued by the additional investment phase, so traditional valuation multiples remain of limited use. For our DCF, we have raised the WACC by 1% to 9% to reflect rising interest rates, rather than any company-specific reason. Using this and terminal growth of 2%, the DCF now indicates a value of €47.66/share, from our April figure of €57.93, a level still well above the current market price.
Click here to view the full report or here to sign up to receive research as it is published.
All reports published by Edison are available to download free of charge from its website
www.edisongroup.com
About Edison: Edison is a leading research and investor relations consultancy, connecting listed companies to the widest pool of global investors. By focusing on the volume and quality of investors reached – across institutions, family offices, wealth managers and retail investors – Edison can create and gauge intent to purchase, even in the darkest pools of capital, and then make introductions via non-deal roadshows, events or virtual meetings.
Having been the first in-market 17 years ago, Edison now has more than 100 analysts covering every economic sector. Headquartered in London, Edison also has offices in New York, Frankfurt, Amsterdam and Tel Aviv and a presence in Athens, Johannesburg and Sydney.
Edison is authorised and regulated by the Financial Conduct Authority.
Edison is not an adviser or broker-dealer and does not provide investment advice. Edison’s reports are not solicitations to buy or sell any securities.
For more information, please contact Edison:
Fiona Orford-Williams +44 (0)20 3077 5739 media@edisongroup.com
Max Hayes +44 (0)20 3077 5700 media@edisongroup.com
Learn more at www.edisongroup.com and connect with Edison on:
LinkedIn www.linkedin.com/company/edison-group-/
Twitter www.twitter.com/Edison_Inv_Res
YouTube www.youtube.com/edisonitv
