CECONOMY AG (CEC) AI Stock Analysis

• Market Cap: €1.35B
• Dividend Yield: N/A
• Average Volume (3M): 350.78K
• Price to Earnings (P/E): 19.6
• Beta (1Y): 1.16
• Revenue Growth: 3.37%
• EPS Growth: -140.52%
• Country: DE
• Employees: 40,990
• Sector: Consumer Cyclical
• Sector Strength: 72
• Industry: Specialty Retail
• EPS (TTM): -0.08
• Shares Outstanding: 485,221,070
• 10 Day Avg. Volume: 442,461
• 30 Day Avg. Volume: 350,784
• PEG Ratio: -2.89
• Price to Book (P/B): 2.38
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 2.37
• 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: €3.80
• Price Target Upside: 36.69% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 3

• Rating: 63 Neutral
• Price Target: €3.50 ▲( 25.90% Upside)

CECONOMY AG's stock score is driven by solid financial performance and moderate valuation. The company's ability to manage cash flow effectively while navigating high leverage is a key strength, though profitability margins remain a concern. Technical indicators suggest caution, as short-term weakness is evident. The stock is appealing for those considering growth potential in the retail sector but may not suit income-focused investors due to the lack of a dividend.

CECONOMY AG Business Overview & Revenue Model

Company Description

Ceconomy AG engages in the consumer electronics retail business. The company operates approximately 850 stores in 14 countries under the MediaMarkt brand; and approximately 170 stores in 3 countries under the Saturn brand. It also operates Flip4New for selling used electronic articles online. In addition, the company offers professional assistance for the installation, connection, and troubleshooting of electronic devices at home under the Deutsche Technikberatung brand. It operates in Germany, Austria, Switzerland, and Hungary, as well as in Western, Southern, and Eastern Europe. The company is based in Düsseldorf, Germany.

How the Company Makes Money

CECONOMY AG generates revenue primarily through the sale of consumer electronics and related services. Its business model is centered around its extensive retail network, both physical stores and online platforms, under the MediaMarkt and Saturn brands. These brands are well-known for their competitive pricing and comprehensive product ranges. Additionally, CECONOMY earns income from after-sales services, including extended warranties, repair services, and installation services. The company also benefits from strategic partnerships with electronics manufacturers and suppliers, enabling them to offer exclusive products and promotions. Furthermore, CECONOMY's investment in digital transformation has enhanced its e-commerce operations, contributing significantly to its revenue streams.

CECONOMY AG Financial Statement Overview

Summary

CECONOMY AG shows stable revenue growth and effective cash flow management with a robust free cash flow. However, high leverage and modest profitability margins present risks. Improvements in operational efficiency and profitability suggest a positive outlook, but managing debt levels remains crucial.

Income Statement

CECONOMY AG's income statement displays a stable revenue growth pattern with a TTM revenue increase from €22.44 billion to €23.03 billion. The gross profit margin stands at an impressive 16.85%, while the net profit margin is modest at 0.33% due to thin net income. The EBIT and EBITDA margins are 0.82% and 4.42%, respectively, indicating moderate operational efficiency. Despite past profitability challenges, recent improvements signal a positive trajectory.

Balance Sheet

The balance sheet reflects a high debt-to-equity ratio of 3.89, suggesting significant leverage, which is common in the retail sector but poses potential risks. The return on equity (ROE) is 11.54%, showing effective use of equity to generate profit, though it remains vulnerable to market fluctuations. The equity ratio is low at 5.09%, indicating reliance on external financing. Overall, financial stability is a concern, balanced by solid asset management.

Cash Flow

Cash flow analysis reveals a robust free cash flow of €636 million, with a slight decrease from €645 million previously, indicating strong cash generation. The operating cash flow to net income ratio is high, demonstrating efficient cash operations relative to earnings. The free cash flow to net income ratio is also strong, highlighting the company's ability to convert profits into cash effectively. These metrics suggest sound cash flow management despite revenue pressures.

Breakdown
TTM	Sep 2024	Sep 2023	Sep 2022	Sep 2021	Sep 2020
Income Statement		Total Revenue
23.03B	22.44B	22.24B	21.77B	21.36B	20.83B
	Gross Profit
3.88B	3.96B	3.94B	1.71B	1.67B	1.83B
	EBIT
189.00M	229.00M	114.00M	118.00M	377.00M	-50.00M
	EBITDA
1.02B	997.00M	806.00M	839.00M	958.00M	1.01B
	Net Income Common Stockholders
77.00M	76.00M	-39.00M	126.00M	232.00M	-218.00M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
2.49B	1.15B	897.00M	910.00M	1.86B	1.64B
	Total Assets
13.10B	10.13B	9.63B	10.00B	10.67B	10.46B
	Total Debt
2.59B	2.63B	2.58B	2.77B	2.87B	2.42B
	Net Debt
101.00M	1.62B	1.69B	2.00B	1.28B	938.00M
	Total Liabilities
12.43B	9.62B	9.17B	9.41B	9.91B	9.91B
	Stockholders Equity
667.00M	516.00M	463.00M	590.00M	713.00M	487.00M
Cash Flow		Free Cash Flow
636.00M	645.00M	828.00M	13.00M	309.00M	1.05B
	Operating Cash Flow
835.00M	838.00M	1.00B	219.00M	450.00M	1.17B
	Investing Cash Flow
-187.00M	-162.00M	-236.00M	-65.00M	-263.00M	-248.00M
	Financing Cash Flow
-553.00M	-585.00M	-649.00M	-905.00M	-77.00M	-589.00M

CECONOMY AG Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 2.78
• 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:CEC, the sentiment is Negative. The current price of 2.78 is below the 20-day moving average (MA) of 3.13, below the 50-day MA of 3.22, and below the 200-day MA of 3.00, indicating a bearish trend. The MACD of -0.08 indicates Positive momentum. The RSI at 33.67 is Neutral, neither overbought nor oversold. The STOCH value of 6.36 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for DE:CEC.

CECONOMY AG Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
CEC	63 Neutral	€1.35B	19.63	-6.95%	―	3.37%	-140.52%
Sector *	62 Neutral	$6.88B	11.26	2.78%	3.93%	2.65%	-22.00%
0MG1		€4.68B	30.92		1.75%	―	―
0OC2		€440.68M	―	-7.72%	―	―	―
0KVR		€664.33M	―	-10.39%	3.06%	―	―
0MYZ		€2.89B	20.69	30.25%	3.61%	―	―
CTTAF		$17.47B	12.70	10.07%	3.02%	―	―