Solteq: On its way from a retail sector IT consultant to a product house
We raise our target price for Solteq to EUR 3.4 (previously 3.0) reflecting updated estimates and we also raise our recommendation to Accumulate (previous Reduce). The 2010s were challenging for IT service and industry solution supplier Solteq. Solteq changed its strategy in 2016 and started building a new base for a growth strategy based on its own products and internationalization. Last year, we saw the first signs of a result turnaround and success in the transformation of the product business. Despite modest estimates for the product business, we expect strong earnings growth over the next few years. Valuation is attractive from many angles with our estimates.
Solteq is an IT consulting company. The company specializes in ERP - Enterprise Resource Planning. Other services offered are related to financial management and inventory management. The customers consist of small and medium-sized business customers operating in the retail and hospitality industries. The operations are conducted on a global level, mainly in Europe, North America and Asia.
Read more on company pageKey Estimate Figures2021-02-02
| 2019 | 20e | 21e | |
|---|---|---|---|
| Revenue | 58.3 | 60.1 | 65.1 |
| growth-% | 2.5 % | 3.2 % | 8.3 % |
| EBIT (adj.) | 3.5 | 5.3 | 6.5 |
| EBIT-% (adj.) | 6.0 % | 8.9 % | 10.0 % |
| EPS (adj.) | 0.05 | 0.13 | 0.20 |
| Dividend | 0.00 | 0.03 | 0.05 |
| Dividend % | 0.0 % | 13.2 % | 21.9 % |
| P/E (adj.) | 28.2 | 1.8 | 1.2 |
| EV/EBITDA | 5.4 | 2.8 | 2.2 |
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