1&1 AG (1U1) AI Stock Analysis

• Market Cap: €4.14B
• Dividend Yield: 0.21%
• Average Volume (3M): 40.46K
• Price to Earnings (P/E): 32.6
• Beta (1Y): 0.69
• Revenue Growth: -0.46%
• EPS Growth: -50.77%
• Country: DE
• Employees: 3,281
• Sector: Technology
• Sector Strength: 88
• Industry: Telecommunications Services
• EPS (TTM): 0.26
• Shares Outstanding: 176,764,650
• 10 Day Avg. Volume: 24,134
• 30 Day Avg. Volume: 40,457
• PEG Ratio: -0.32
• Price to Book (P/B): 0.36
• Price to Sales (P/S): 0.55
• P/FCF Ratio: 108.56
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: €20.74
• Price Target Upside: -14.83% Downside
• Rating Consensus: Hold
• Number of Analyst Covering: 6
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 65 Neutral
• Price Target: €26.00 ▲(6.78% Upside)

1&1 Drillisch AG's strong financial stability and positive technical trends are offset by profitability challenges and a high valuation. The stock's overbought technical indicators suggest caution, and the high P/E ratio indicates potential overvaluation. Investors should monitor operational efficiency improvements and market conditions closely.

Positive Factors

Financial Stability

The company's strong equity base and low leverage indicate a solid financial foundation, providing resilience against economic fluctuations.

Cash Flow Generation

Effective cash generation supports ongoing operations and investments, enhancing the company's ability to fund growth initiatives.

Recurring Revenue Model

A subscription-based model with long-term contracts ensures steady revenue streams, reducing volatility and enhancing financial predictability.

Negative Factors

Profitability Challenges

Decreasing profit margins and revenue fluctuations suggest operational inefficiencies, which could hinder long-term profitability.

Capital Expenditure Pressures

High capital expenditures strain free cash flow, potentially limiting the company's ability to invest in growth or return capital to shareholders.

Decreasing Return on Equity

A declining return on equity suggests inefficiencies in using shareholder funds, which could affect investor confidence and long-term growth prospects.

1&1 AG Business Overview & Revenue Model

Company Description

1&1 AG, together with its subsidiaries, operates as a telecommunications provider in Germany. The company operates through Access and 5G segments. It provides broadband and mobile services; and wireless access and landline products that include related applications, such as home networks, online storage, telephony, and video on demand or international protocol television. The company also offers wireless network services using the network of Telefónica; and 5G mobile network services, as well as develops software solutions. In addition, it provides marketing, sales, logistics, customer, financial controlling, receivables, and risk management services; network planning services; information technology services; and product management services, as well as operates a data center. The company operates under the brand names of 1&1, yourfone, smartmobil.de, winSIM, PremiumSIM, simply, maxim, DeutschlandSIM, sim.de, eteleon, discoTEL, M2M-Mobil, handyvertrag.de, and Galaxy EXPERTE brands. It serves approximately 11.2 million mobile and 4.2 million broadband customers. The company was founded in 1988 and is headquartered in Maintal, Germany. 1&1 AG is a subsidiary of United Internet AG.

How the Company Makes Money

1&1 AG generates revenue through multiple channels, primarily by offering subscription-based services and one-time sales of products. Its core revenue streams include web hosting and domain registration services, which attract both individual customers and businesses looking to establish an online presence. The company also earns from its telecommunications services, including mobile and broadband subscriptions. Partnerships with technology providers and platforms enhance its service offerings, while strategic marketing campaigns help to expand its customer base. Additionally, 1&1 benefits from customer retention through long-term contracts, which contribute to recurring revenue and stability in earnings.

1&1 AG Financial Statement Overview

Summary

1&1 Drillisch AG exhibits strong financial stability with a robust equity position and low leverage. However, the company faces profitability challenges, with declining margins and inconsistent revenue growth. Cash flow generation is solid, yet capital expenditures impact free cash flow. Enhancing operational efficiency and profitability will be key to sustaining financial health.

Income Statement

1&1 Drillisch AG's revenue has seen fluctuations, with a slight decrease in 2024. The gross profit margin is healthy but has declined over recent years, indicating potential cost pressures. Net profit margin also decreased in 2024, suggesting challenges in maintaining profitability. EBIT and EBITDA margins have contracted, reflecting a need for operational efficiency improvements.

Balance Sheet

The company maintains a strong equity base with a high equity ratio, suggesting financial stability. The debt-to-equity ratio is low, reflecting conservative leverage. However, the return on equity has been decreasing, indicating a need to enhance profitability from equity investments.

Cash Flow

Free cash flow has improved in 2024, but overall growth has been inconsistent. The operating cash flow to net income ratio is healthy, indicating good cash generation from operations. However, free cash flow to net income is relatively low, pointing to capital expenditure pressures.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	4.06B	4.06B	4.10B	3.96B	3.91B	3.79B
Gross Profit	930.74M	1.04B	1.16B	1.23B	1.20B	904.99M
EBITDA	552.28M	607.13M	673.80M	698.09M	712.10M	469.15M
Net Income	127.14M	212.76M	314.95M	367.33M	370.02M	219.59M
Balance Sheet
Total Assets	8.55B	8.13B	7.74B	7.26B	7.06B	6.69B
Cash, Cash Equivalents and Short-Term Investments	51.96M	14.04M	3.73M	5.13M	5.79M	8.66M
Total Debt	0.00	412.96M	260.55M	102.67M	102.28M	98.18M
Total Liabilities	2.35B	2.04B	1.85B	1.68B	1.84B	1.84B
Stockholders Equity	6.20B	6.09B	5.89B	5.58B	5.22B	4.85B
Cash Flow
Free Cash Flow	161.61M	20.46M	-70.14M	-68.82M	394.56M	243.43M
Operating Cash Flow	610.35M	311.42M	225.58M	180.57M	431.96M	450.67M
Investing Cash Flow	-780.85M	-180.80M	-125.23M	-97.42M	-350.57M	-397.35M
Financing Cash Flow	169.78M	-129.68M	-101.83M	-83.03M	-81.20M	-80.75M

1&1 AG Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 24.35
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For DE:1U1, the sentiment is Positive. The current price of 24.35 is above the 20-day moving average (MA) of 23.61, above the 50-day MA of 22.23, and above the 200-day MA of 18.98, indicating a neutral trend. The MACD of 0.37 indicates Positive momentum. The RSI at 58.10 is Neutral, neither overbought nor oversold. The STOCH value of 38.43 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for DE:1U1.

1&1 AG Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
FNTN	75 Outperform	€3.45B	12.79	18.42%	6.72%	-0.62%	16.87%
DTE	67 Neutral	€132.63B	11.00	20.18%	3.29%	3.58%	103.26%
1U1	65 Neutral	€4.14B	32.58	2.07%	0.21%	-0.46%	-50.77%
UTDI	62 Neutral	€4.75B	33.63	2.15%	7.23%	-2.19%	―
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%