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Solteq: Journey continues from retail consultant to energy sector product house

Solteq
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The 2010s were challenging for Solteq that offers IT services and industry-specific solutions, it had a few good years in between, and now it is again seeking a new boost. With the updated strategy, Solteq is now seeking profitable growth with a clearer industry focus and own product solutions. The next few years are critical to the success of the strategy, especially in the energy business. There is clear uncertainty about the timing and trajectory of the earnings turnaround but there is a clear upside in the share if it reaches even close to its financial targets. The company's valuation prices a rather pessimistic future, and the risk/return ratio has turned cautiously attractive again with lower risk levels and the share price drop.

Solteq

1.2EUR12.06.2023, 18.00
1.40EURTarget price
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Recommendation updated:12.06.2023

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 corporate customers active in the retail and hotel industry. Solteq operates worldwide, with the largest presence in Europe, North America, and Asia.

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Key Estimate Figures12.06.2023

202223e24e
202223e24e
Revenue68.460.259.4
growth-%-0.9 %-12.1 %-1.2 %
EBIT (adj.)0.5-0.12.3
EBIT-% (adj.)0.7 %-0.1 %3.9 %
EPS (adj.)-0.03-0.060.03
Dividend0.000.000.03
Dividend %4.5 %
P/E (adj.)--21.5
EV/EBITDA10.02.43.1
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