Original-Research: VOQUZ Labs AG - from NuWays AG

Classification of NuWays AG to VOQUZ Labs AG

Company Name: VOQUZ Labs AG

Reason for the research: Update
Recommendation: BUY
from: 07.03.2024
Target price: 22.00
Target price on sight of: 12 Monaten
Last rating change: 
Analyst: Philipp Sennewald

FY prelims: Strong H2 & promising outlook / chg. est & PT
Topic: VOQUZ Labs announced preliminary FY '23, indicating a strong
sequential recovery in H2 regarding both, top-line growth and
profitability. Management also issued a promising outlook for the coming
year. In detail:
H2 sales increased by 16% yoy to EUR 3.4m (eNuW: EUR 3.1m), which should have
been mainly driven by the company's flagship product samQ (eNuW: 75% of
sales), as indicated by the recently published order intake figures.
Importantly, the newly launched product visoryQ, a tool that automates ERP
decisionmaking processes for SAP products, appears to be already in high
demand, accounting for 10% of sales (eNuW). Overall FY '23 sales came in at
EUR 5.2m (eNuW: EUR 5.0m), indicating a 11% yoy increase.
H2 EBITDA came in at EUR 0.9m (eNuW: EUR 0.3m), implying a 28% margin. The gap
to our estimate can be mainly explained by scale related to the better
top-line as well as a higher than expected share of license revenues. On
this basis, FY '23 EBITDA turned positive at EUR 0.4m (eNuW: EUR -0.2m), an
8.6% margin. Moreover, the company indicated that EBIT might even turn
slightly positive (eNuW new: neutral), while FCF should have still been
slightly negative with EUR -0.2m (eNuW new) following continuous investments
into the product portfolio.
Promising outlook. Management also put out a guidance for FY '24, targeting
sales growth of 10-20% yoy (eNuW new: +17%) and an EBITDA margin of 15-20%
(eNuW new: 16%). This should be, among others, driven by the ongoing
S/4HANA transition (mainstream maintenance for old ERP software ends in
2027), of which VOQUZ is seen to be one of the main beneficiaries
especially with its new product visoryQ, as well as compelling cross- and
up-selling opportunities. Further, we expect a slight rebound effect, after
many IT buyers postponed orders amid macro headwinds in 2023. From 2025
onwards, management aims for annual organic sales growth of >20% (eNuW new:
+25% in '25e & +22% in '26e) and EBITDA margins north of 20% (eNuW new:
20.5% in '25e).
Despite the strong share price performance YTD, valuation still looks
undemanding with the stock trading on a mere 1.2x EV/Sales and 7.6x
EV/EBITDA '24e (0.8x/4.0x based on FY25e) carried by the strong underlying
mid-term prospects as well as the scalability of the capital light business
Reiterate BUY with an upgraded PT of EUR 22 (old: EUR 20) based on DCF.

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NuWays AG - Equity Research
Web: www.nuways-ag.com
Email: research@nuways-ag.com
LinkedIn: https://www.linkedin.com/company/nuwaysag
Adresse: Mittelweg 16-17, 20148 Hamburg, Germany
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