Kulmbach (www.aktiencheck.de) – Serviceware stock analysis from “Der Aktionär”:
Michael Schröder from the investor magazine “Der Aktionär” takes a close look at the shares of Serviceware SE (ISIN: DE000A2G8X31, WKN: A2G8X3, ticker symbol: SJJ) in a current stock analysis.
Even if the prices of the AI high flyers in the USA have gone into consolidation mode in the last few weeks, the industry is still in the focus of investors. Serviceware SE, based in Hesse, has been relying on the use of artificial intelligence for service processes and financial planning for several years – as the latest figures show with increasing success.
Serviceware offers software solutions for the digitization and automation of service processes (Enterprise Service Management – ESM for short), with which companies can increase their service quality and efficiently manage their service costs. The company has more than 1,000 customers worldwide from a wide range of industries, including 18 DAX companies.
Serviceware has been relying on the potential of artificial intelligence (AI) in service management since 2018. Today, AI is the central innovation factor of the Serviceware platform.
The half-year figures published at the end of July showed that the company had noticeably improved its own efficiency. Sales increased by 10.2 percent to 50.3 million euros in the first six months. The second quarter was the strongest quarter in the company’s history to date with sales of 25.4 million euros. The record level is all the more significant because it was achieved despite the transformation from one-off license billing to a SaaS business model (sales share: 64 percent).
Profitability was also significantly improved. EBITDA turned from -1.2 million euros to +1.6 million euros. The operating cash flow is now at an excellent level again at 9.3 million euros (previous year: -2.3 million euros). The bottom line is that the numbers are still in the red. However, the net loss was significantly reduced from -2.82 million to -0.76 million euros.
The transformation to the SaaS business model is progressing dynamically. “We are also managing to achieve historic highs in terms of total sales,” says board member Dirk Martin. “All of this is accompanied by significantly improved profitability and a high positive operating cash flow.”
“Our good financial indicators are the result of our holistic platform strategy with a strong focus on AI,” explains the CEO. From the company manager’s point of view, AI is the game changer in the automation of service processes. “We recognized this development early on and that is why we now have a leading global position in this area.”
Also positive: The order backlog has increased by 35.3 percent to a record value of 75 million euros since the end of the 2022/23 financial year on November 30, 2023.
After a strong first half of the year, the Board of Directors confirmed the forecast for the year as a whole – but described the plan as quite conservative. In terms of sales, Serviceware expects an increase of between five and 15 percent compared to the previous year’s figure of 91.5 million euros. A further significant improvement is also expected for EBITDA (previous year: 0.2 million euros).
The analysts at Montega Research expect a significantly increasing gross profit in the coming quarters through further sales of proprietary software, which should lead to significant earnings growth while operating costs remain constant.
In the end, with revenues of around 100 million euros, an EBITDA of more than three million euros could be recorded for the year as a whole. Even a turnaround in net earnings cannot be ruled out. The package is rounded off by a solid balance sheet.
After a few failed attempts, Serviceware finally seems to be getting the operational curve. “The shareholder” had already pointed out this scenario to the company at the end of 2023. If the company stays on track and the market recognizes the potential, the share, which is still flying under the radar of many investors, is likely to continue its upward movement and head towards the 18 euro mark. With the jump above the 14 euro mark, the appropriate technical buy signal would be generated. “The Shareholder” relies on this scenario in the Real Depot. (Analysis from October 6th, 2024)
Please also note information on the obligation to disclose conflicts of interest in accordance with Directive 2014/57/EU and corresponding EU regulations at the following link.
Note on conflicts of interest: Serviceware shares are held in a real portfolio of Börsenmedien AG. (07.10.2024/ac/a/nw)
Disclosure of possible conflicts of interest:
You can view possible conflicts of interest on the site of the creator/source of the analysis.
