adesso AG (ADN1) AI Stock Analysis

• Market Cap: €563.39M
• Dividend Yield: 0.87%
• Average Volume (3M): 8.63K
• Price to Earnings (P/E): 41.5
• Beta (1Y): 1.20
• Revenue Growth: 12.37%
• EPS Growth: 196.11%
• Country: DE
• Employees: 10,320
• Sector: Technology
• Sector Strength: 88
• Industry: Information Technology Services
• EPS (TTM): 1.87
• Shares Outstanding: 6,528,220
• 10 Day Avg. Volume: 6,464
• 30 Day Avg. Volume: 8,626
• PEG Ratio: 0.45
• Price to Book (P/B): 3.02
• Price to Sales (P/S): 0.44
• P/FCF Ratio: 7.07
• 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: €127.33
• Price Target Upside: 47.54% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 3
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 56 Neutral
• Price Target: €95.00 ▲(10.08% Upside)

The overall stock score for adesso AG is primarily influenced by its solid financial performance, which indicates stable growth and operational efficiency. However, the technical analysis reveals bearish signals, suggesting potential short-term price declines. The valuation metrics indicate the stock may be overvalued, which could limit upside potential. The absence of earnings call data and notable corporate events means these factors do not impact the score.

Positive Factors

Revenue Growth

Consistent revenue growth indicates a strong demand for adesso AG's services and its ability to expand its market presence, supporting long-term business sustainability.

Operational Efficiency

Improved gross profit margins reflect enhanced operational efficiency, which can lead to better profitability and competitive positioning over time.

Leverage Reduction

A reduced debt-to-equity ratio suggests improved financial stability and lower risk, enhancing the company's ability to invest in growth opportunities.

Negative Factors

Low Net Profit Margin

A low net profit margin indicates difficulties in converting revenue into actual profit, which may hinder long-term profitability and shareholder returns.

Free Cash Flow Decline

Declining free cash flow can limit the company's ability to fund new projects and investments, potentially impacting future growth and financial flexibility.

High Reliance on Debt

A high reliance on debt can increase financial risk and interest obligations, potentially affecting the company's long-term financial health and investment capacity.

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 primarily through its consulting and software development services. The company operates on a project-based revenue model, where it charges clients for the design, development, and implementation of custom software solutions tailored to their specific needs. Key revenue streams include long-term contracts with enterprises, hourly billing for consulting services, and maintenance agreements for ongoing support. Additionally, adesso AG benefits from strategic partnerships with major technology providers, which enhance its service offerings and enable it to leverage cutting-edge technologies for its clients. The diverse industry focus allows for a broad client base and mitigates risks associated with economic fluctuations in any single sector.

adesso AG Financial Statement Overview

Summary

adesso AG demonstrates steady revenue growth and operational efficiency, but faces challenges with profitability and increased leverage. The company needs to focus on improving profit margins and managing debt levels to enhance financial stability. Cash flow management remains a strength, despite recent declines in free cash flow growth.

Income Statement

adesso AG has shown consistent revenue growth over the years, with a TTM revenue growth rate of 3.07%. The gross profit margin has slightly decreased in the TTM period compared to previous years, indicating some pressure on cost management. The net profit margin remains low at 0.63% in the TTM, suggesting limited profitability. However, the company has maintained stable EBIT and EBITDA margins, reflecting operational efficiency.

Balance Sheet

The company's debt-to-equity ratio has increased to 1.52 in the TTM, indicating higher leverage, which could pose a risk if not managed properly. The return on equity is modest at 4.16%, showing limited returns to shareholders. The equity ratio is relatively stable, suggesting a balanced asset structure.

Cash Flow

adesso AG's free cash flow growth rate is negative in the TTM, which is a concern for cash generation. However, the operating cash flow to net income ratio is healthy, indicating good cash conversion from earnings. The free cash flow to net income ratio is strong at 80.79%, reflecting efficient cash management.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	1.42B	1.30B	1.14B	900.25M	678.32M	523.38M
Gross Profit	190.28M	160.79M	146.66M	269.51M	102.36M	164.20M
EBITDA	112.38M	101.43M	82.43M	93.32M	102.99M	60.48M
Net Income	13.41M	8.12M	3.21M	28.60M	47.50M	20.95M
Balance Sheet
Total Assets	851.45M	876.76M	785.99M	655.57M	555.71M	372.15M
Cash, Cash Equivalents and Short-Term Investments	45.17M	89.68M	103.01M	90.96M	111.47M	56.06M
Total Debt	368.31M	325.18M	285.52M	219.56M	197.57M	129.82M
Total Liabilities	657.05M	682.85M	578.21M	440.38M	363.88M	269.27M
Stockholders Equity	191.13M	189.97M	203.00M	210.03M	185.16M	102.34M
Cash Flow
Free Cash Flow	54.86M	81.00M	42.52M	12.12M	29.55M	54.16M
Operating Cash Flow	68.92M	98.67M	76.86M	36.07M	47.91M	64.96M
Investing Cash Flow	-62.48M	-35.13M	-50.78M	-43.50M	-25.87M	-28.47M
Financing Cash Flow	-2.43M	-74.28M	-15.89M	-10.98M	32.65M	-27.53M

adesso AG Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 86.30
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

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 86.3 is below the 20-day moving average (MA) of 91.17, below the 50-day MA of 92.61, and below the 200-day MA of 91.22, indicating a bearish trend. The MACD of -1.92 indicates Positive momentum. The RSI at 32.31 is Neutral, neither overbought nor oversold. The STOCH value of 16.02 is Positive, 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
GFT	77 Outperform	€498.09M	14.23	13.78%	2.64%	3.28%	-26.16%
D6H	68 Neutral	€582.34M	26.42	13.54%	1.43%	7.30%	-15.88%
COK	65 Neutral	€866.67M	50.15	3.09%	3.64%	-0.61%	-52.28%
SHF	65 Neutral	€560.03M	21.35	19.08%	―	20.52%	84.19%
A1OS	63 Neutral	€199.28M	17.24	10.26%	4.00%	-1.50%	-37.05%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
ADN1	56 Neutral	€563.39M	41.50	6.82%	0.87%	12.37%	196.11%