Buy
Original-Research: USU Software AG - von NuWays AG
Einstufung von NuWays AG zu USU Software AG
Unternehmen: USU Software AG
ISIN: DE000A0BVU28
Anlass der Studie: Q3 Preview
Empfehlung: Buy
seit: 25.10.2023
Letzte Ratingänderung:
Analyst: Philipp Sennewald
Q3e: Sequential improvements as headwinds remain; chg.
USU will report Q3 figures on 22 November, which are seen to show
sequential improvements compared to the previous quarter, especially on the
margin side. This comes despite ongoing headwinds
in connection with longer sales cycles, particularly in the license
business, which led to a weak Q2.
Sales are seen to increase 5.3% qoq to € 33.3m, implying a muted 2.0% yoy,
which however comes against a strong comparable base. The continuously
strong growth in SaaS (eNuW: +23% yoy to €
4.6m) as well as solidly growing consulting revenues (eNuW: +10% yoy to €
20.2m) look hereby set to only partly compensate for the ongoing decline in
license sales (eNuW: -65% yoy to € 1.4m).
On this basis, Q3 EBITDA is expected to come in at € 2.9m (-33% yoy),
implying a margin of 8.8% (+2pp qoq). The yoy profitability decline is
mainly explained by the combination of an increased cost
base, mainly R&D in connection with AI projects, as well as the strong
decline in license sales, which usually show higher initial margins
compared to consulting and SaaS revenues.
Mind you, declining license sales and hence a short-term margin compression
were already included in our estimates in consideration of the company’s
mid-term strategy which is to significantly increase
the share of SaaS sales to >75% until 2026. While perpetual license sales
provide higher initial margins, the SaaS payments are seen to equal the
one-time license payments (+ annual maintenance
fees) after c. 3 years, thus allowing for a significant margin expansion as
hardly any incremental costs are incurred. While 2024e should be a
transition year, we expect the switch to SaaS to start paying
off in 2025e with an EBITDA margin of +15%.
That said, the company continues to look on track to reach its mid-term
targets (until 2026e) of 10% organic sales CAGR, >25% SaaS CAGR and an
EBITDA margin in the range of 17-19% thanks to the
ongoing high pace of the SaaS transformation. On top of this, the
continuous implementation of the “One USU” strategy, which among others
aims for leaner Sales & Marketing structures, should further benefit
profitability going forward.
As shares have been down heavily since the company warned in August,
valuation appears ever more undemanding, trading at only 17.3x PE ‘24e, a
clear discount to the 2-year forward-looking average of
25.1x.
BUY, unchanged PT of € 30.00 based on DCF.
Die vollständige Analyse können Sie hier downloaden: http://www.more-ir.de/d/27961.pdf
Kontakt für Rückfragen
NuWays AG
Mittelweg 16-17
20148 Hamburg
Germany
info@nuways-ag.com
www.nuways-ag.com
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