adesso AG (ADN1) AI Stock Analysis

• Market Cap: €587.66M
• Dividend Yield: 0.72%
• Average Volume (3M): 7.05K
• Price to Earnings (P/E): 75.2
• Beta (1Y): 1.19
• Revenue Growth: 13.30%
• EPS Growth: N/A
• Country: DE
• Employees: 10,320
• Sector: Technology
• Sector Strength: 86
• Industry: Information Technology Services
• EPS (TTM): -0.54
• Shares Outstanding: 6,522,272
• 10 Day Avg. Volume: 8,030
• 30 Day Avg. Volume: 7,052
• PEG Ratio: 0.91
• Price to Book (P/B): 3.05
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 7.06
• 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: €119.20
• Price Target Upside: 32.44% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 5

• Rating: 66 Neutral
• Price Target: €95.00 ▲(5.56%Upside)

adesso AG shows strong financial performance, particularly in revenue and cash flow growth, contributing positively to its score. However, technical analysis indicates mixed short-term signals, and the stock appears overvalued with a high P/E ratio. These factors, combined with the lack of earnings call and corporate event impacts, result in a moderately favorable overall stock score.

Positive Factors

EBITDA Improvement

EBITDA for 2024 increased by 23% year-over-year, surpassing the growth in sales.

Sales Growth

Sales grew 14.2% growth, contributing to the overall positive performance of the company.

Negative Factors

Cost Increase

The cost of materials increased significantly by 27% due to the employment of external staff.

Margin Pressure

Profit warnings of the past two years and weaker margin compared to peers prompt a more conservative stance.

adesso AG Business Overview & Revenue Model

Company Description

adesso SE operates as an IT service provider focusing on consulting and software development in Germany, Austria, Switzerland, and internationally. It operates through two segments, IT Services and IT Solutions. The company offers IT consulting and software development services; and distributes software products and industry-specific or industry-neutral solutions. It serves automotive, banks/financial services, utilities, healthcare, retail, life sciences, manufacturing, media and entertainment, food, exhibition, public authorities, public transportation, and insurance industries. The company was founded in 1997 and is based in Dortmund, Germany.

How the Company Makes Money

adesso AG generates revenue through a combination of consulting fees, project-based income, and software licensing. The company primarily earns money by providing IT consulting services and developing custom software solutions tailored to the needs of its clients across different industries. Additionally, adesso AG has strategic partnerships with technology vendors and platforms, which enable it to offer integrated solutions and drive further sales. The consultancy and development projects are often long-term engagements, contributing to a stable revenue stream. Moreover, as digital transformation continues to be a priority for businesses, adesso AG benefits from increased demand for its services, further supporting its financial performance.

adesso AG Financial Statement Overview

Summary

adesso AG exhibits strong financial performance with impressive revenue growth and robust cash flow metrics. The income statement shows solid profitability, and the balance sheet is stable with manageable leverage. However, there is room for improvement in gross profit margins, and leverage levels should be monitored.

Income Statement

The company shows strong revenue growth with a 14.27% increase from the previous year to TTM. Gross profit margin is moderate at 13.66%, and net profit margin is improving. The EBIT margin is robust at 6.60%, indicating efficient operations. Overall, the income statement reflects positive growth and profitability trends, although gross profit margins suggest room for improvement.

Balance Sheet

The balance sheet reveals a solid equity ratio of 21.67%, providing a stable financial foundation. The debt-to-equity ratio is 1.52, indicating moderate leverage. Return on equity stands at 4.28%, showing adequate returns for shareholders. Overall, the balance sheet is stable, but there is potential risk if leverage increases significantly.

Cash Flow

Cash flow analysis indicates significant growth in free cash flow, up by 93.49% in the TTM period, highlighting strong cash generation. The operating cash flow to net income ratio is 12.54, suggesting efficient cash conversion. The company maintains healthy free cash flow relative to net income, indicating strong liquidity and capacity for reinvestment.

Breakdown	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	1.30B	1.14B	900.25M	678.32M	523.38M
Gross Profit	160.79M	324.13M	269.51M	206.61M	164.20M
EBITDA	101.43M	82.43M	93.32M	102.99M	60.48M
Net Income	8.12M	3.21M	28.60M	47.50M	20.95M
Balance Sheet
Total Assets	876.76M	785.99M	655.57M	555.71M	372.15M
Cash, Cash Equivalents and Short-Term Investments	89.68M	103.01M	93.79M	111.47M	56.06M
Total Debt	288.19M	285.52M	219.56M	197.57M	129.82M
Total Liabilities	682.85M	578.21M	440.38M	363.88M	269.27M
Stockholders Equity	189.97M	203.00M	210.03M	191.37M	102.34M
Cash Flow
Free Cash Flow	81.00M	42.52M	12.12M	29.55M	54.16M
Operating Cash Flow	98.67M	76.86M	36.07M	47.91M	64.96M
Investing Cash Flow	-35.13M	-50.78M	-43.50M	-25.87M	-28.47M
Financing Cash Flow	-74.28M	-15.89M	-10.98M	33.02M	-27.53M

adesso AG Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 90.00
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For DE:ADN1, the sentiment is Negative. The current price of 90 is above the 20-day moving average (MA) of 87.33, below the 50-day MA of 91.21, and above the 200-day MA of 86.58, indicating a bearish trend. The MACD of -0.75 indicates Negative momentum. The RSI at 39.18 is Neutral, neither overbought nor oversold. The STOCH value of 66.67 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for DE:ADN1.

adesso AG Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
ADN1	66 Neutral	€587.66M	75.21	4.09%	0.72%	13.30%	―
Sector *	63 Neutral	£564.00M	24.42	-6.00%	2.45%	3.52%	-29.29%
0JCO		€276.00M	17.37	15.04%	2.89%	―	―
0O0F		€863.52M	34.31	4.13%	3.65%	―	―
0O2W		€637.09M	14.86	16.30%	1.77%	―	―
0NJB		€519.30M	22.89	16.29%	―	―	―
0W19		€514.02M	20.57	16.57%	1.62%	―	―