Edel SE & Co. KGAA (EDL) AI Stock Analysis

• Market Cap: €114.63M
• Dividend Yield: 6.85%
• Average Volume (3M): 1.59K
• Price to Earnings (P/E): 8.9
• Beta (1Y): 0.19
• Revenue Growth: -0.48%
• EPS Growth: -13.65%
• Country: DE
• Employees: 1,017
• Sector: Communication Services
• Sector Strength: 97
• Industry: Entertainment
• EPS (TTM): 0.35
• Shares Outstanding: 22,734,512
• 10 Day Avg. Volume: 2,132
• 30 Day Avg. Volume: 1,593
• PEG Ratio: 0.53
• Price to Book (P/B): 1.53
• Price to Sales (P/S): 0.34
• P/FCF Ratio: 19.46
• 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: N/A
• Price Target Upside: N/A
• Rating Consensus: N/A
• Number of Analyst Covering: 0
• EPS Forecast (FY): 0.62
• Revenue Forecast (FY): €273.10M

• Rating: 65 Neutral
• Price Target: €5.50 ▲(20.61% Upside)
• Action: Reiterated Date: 02/02/26
• Date: Action: Reiterated 02/02/26

The score is primarily held back by inconsistent cash generation and elevated leverage despite improving profitability. Technicals are positive but look overextended, while the relatively low P/E and high dividend yield provide meaningful support.

Positive Factors

Structurally high gross margins

A sustained ~77% gross margin offers durable operating leverage and pricing flexibility across recorded music, publishing and services. High gross margins help absorb distribution costs, fund catalog investment, and preserve profitability even if top-line growth moderates.

Improving operating and net margins

Sustained margin expansion since 2020 indicates better cost control, more efficient catalog monetization and improved mix toward higher-margin activities. Durable margin improvement strengthens earnings quality and increases resilience to cyclical dips in revenue.

Diversified revenue model

Multiple revenue pillars—recorded music, publishing royalties and fee-based logistics/services—reduce reliance on any single income stream. Recurring publishing income and long-term service contracts smooth cyclicality and make cash flows more predictable over time.

Negative Factors

Volatile and weak cash generation

Large FCF swings and low cash conversion (FCF only ~23% of net income in 2025) reduce financial predictability and limit capacity to fund catalog acquisitions, dividends or debt reduction. Persistent volatility raises liquidity and refinancing risk over a multi-quarter horizon.

Meaningful leverage

Debt exceeding equity increases sensitivity to earnings volatility and interest costs, constraining strategic flexibility. Elevated leverage limits the firm's ability to pursue acquisitions or absorb downturns without raising funding costs or cutting investment in catalogs and services.

Modest net profitability despite high gross margins

Despite very high gross margins, net margin in mid-single digits leaves a narrow buffer for shocks and reduces retained cash for reinvestment. Limited net profitability constrains capacity to scale catalog purchases or expand service capabilities without adding leverage.

Edel SE & Co. KGAA Business Overview & Revenue Model

Company Description

Edel SE & Co. KGaA operates as a music company in Europe. The company produces, markets, and distributes CDs, DVDs, Blu-rays, vinyl records, and LPs. It also publishes and distributes guidebooks, non-fiction, and children's books, as well as magazines, brochures, catalogues, commercial, and multi-media print products and packaging. In addition, the company offers various TV series and film entertainment. Edel SE & Co. KGaA was founded in 1986 and is based in Hamburg, Germany.

How the Company Makes Money

Edel SE & Co. KGAA generates revenue through multiple streams primarily focused on the music and entertainment industry. Key revenue sources include the sale of physical and digital music recordings, licensing of music rights for use in films, television, and advertisements, as well as revenue from live events and concerts. The company also earns money through music publishing, where it manages the rights of songwriters and composers, collecting royalties from various uses of their work. Strategic partnerships with artists, other record labels, and distribution platforms enhance Edel's market reach and profitability. Additionally, the company may benefit from merchandising associated with its music and artists, further contributing to its earnings.

Edel SE & Co. KGAA Financial Statement Overview

Summary

Operating performance is improving (2025 revenue back to growth and materially higher EBIT/net margins vs. 2020), supported by structurally high gross margins (~77%). However, meaningful leverage (debt-to-equity ~1.31) and especially volatile/weak cash conversion (2025 FCF ~23% of net income; FCF negative in 2024) reduce overall quality of earnings.

Income Statement

Revenue has been broadly stable with a return to growth in 2025 (+4.0% year over year) after a slight dip in 2024, indicating a resilient top line. Profitability has improved versus earlier years: EBIT margin rose to ~8.9% in 2025 (from ~3.8% in 2020) and net margin increased to ~4.8% (from ~1.2% in 2020). A notable strength is the structurally high gross margin (~77% in 2024–2025). Key watch-out: despite solid margins, net profitability remains mid-single-digit, leaving less cushion if demand weakens.

Balance Sheet

Leverage is meaningful: debt is higher than equity with debt-to-equity around ~1.31 in 2025 (and generally ~1.15–1.78 over the period), which raises sensitivity to earnings volatility. Positively, equity has grown over time and returns on equity are strong (about ~21% in 2025), suggesting the business is generating good profits relative to its capital base. Overall, the balance sheet looks workable but not conservative given the leverage profile.

Cash Flow

Cash generation is the main weak spot due to volatility. Free cash flow swung from strongly positive in 2023 (~€12.8m) to negative in 2024 (~-€7.7m), then recovered to modestly positive in 2025 (~€4.7m), with a sharp decline in 2025 free-cash-flow growth. Cash conversion also appears weak recently: 2025 free cash flow was only ~23% of net income, implying profits are not consistently translating into cash. Strength: operating cash flow improved in 2025 versus 2024, but overall consistency remains a concern.

Breakdown	Sep 2025	Sep 2024	Sep 2023	Sep 2022	Sep 2021
Income Statement
Total Revenue	267.82M	258.57M	280.22M	277.02M	251.33M
Gross Profit	205.61M	199.40M	134.02M	132.33M	124.58M
EBITDA	35.28M	32.84M	31.43M	30.84M	25.31M
Net Income	12.81M	11.04M	12.15M	11.59M	6.58M
Balance Sheet
Total Assets	222.44M	205.10M	193.15M	196.23M	160.65M
Cash, Cash Equivalents and Short-Term Investments	11.08M	11.90M	16.50M	15.66M	8.85M
Total Debt	78.30M	71.80M	56.03M	58.45M	43.31M
Total Liabilities	162.51M	150.88M	143.22M	152.31M	124.04M
Stockholders Equity	59.94M	53.51M	48.85M	43.08M	35.75M
Cash Flow
Free Cash Flow	4.71M	-7.68M	12.81M	-4.00M	10.50M
Operating Cash Flow	20.24M	12.59M	32.09M	15.06M	21.96M
Investing Cash Flow	-16.65M	-22.78M	-19.22M	-20.28M	-11.26M
Financing Cash Flow	-13.21M	-4.58M	-6.80M	-3.05M	-6.74M

Edel SE & Co. KGAA Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 4.56
• 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:EDL, the sentiment is Positive. The current price of 4.56 is below the 20-day moving average (MA) of 5.21, below the 50-day MA of 4.90, and above the 200-day MA of 4.36, indicating a bullish trend. The MACD of 0.11 indicates Positive momentum. The RSI at 62.77 is Neutral, neither overbought nor oversold. The STOCH value of 71.43 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for DE:EDL.

Edel SE & Co. KGAA Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
KA8	66 Neutral	€14.47M	19.07	17.66%	4.87%	-0.74%	31.08%
EDL	65 Neutral	€114.63M	8.88	18.72%	6.85%	-0.48%	-13.65%
CLIQ	63 Neutral	€9.72M	-0.23	-43.92%	5.87%	―	―
Sector *	60 Neutral	$48.67B	4.58	-11.27%	4.14%	2.83%	-41.78%
PAL	45 Neutral	€33.30M	-9.23	-1053.34%	―	―	―