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

• Market Cap: €121.06M
• Dividend Yield: 6.85%
• Average Volume (3M): 1.59K
• Price to Earnings (P/E): 3.1
• Beta (1Y): 0.14
• 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: €6.00 ▲(31.58% 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

High gross margins

A ~77% gross margin reflects the low incremental cost of music/publishing once rights are owned, supporting durable profitability. High gross margins provide long-term fuel for catalog investment and services scaling, insulating core economics from modest revenue swings.

Improving operating profitability

Step-up in EBIT and net margins versus 2020 shows the business extracting more value from sales mix and cost control. Sustained margin improvement increases internal cash generation potential and strengthens return on capital across cycles, aiding reinvestment and shareholder returns.

Diversified revenue model and fee-based services

Exposure to recorded music, publishing and contract services spreads revenue risk across royalties, streaming, physical sales and recurring service fees. Fee-based logistics/distribution contracts provide more predictable income streams and deepen client relationships over the medium term.

Negative Factors

Elevated leverage

Leverage above equity increases sensitivity to earnings volatility and limits financial flexibility for catalog acquisitions or opportunistic investments. In a content business with irregular hits, higher debt raises refinancing and covenant risk across economic cycles.

Volatile free cash flow

Large FCF swings show profits don't reliably convert to cash, constraining capacity to buy rights, pay dividends, or reduce debt. Persistent cash conversion variability raises execution risk and can force financing activity at unfavorable times, weakening long-term stability.

Modest net margins limit downside buffer

Despite strong gross margins, net margins remain mid-single-digit, leaving limited cushion against revenue shocks or higher marketing and A&R spending. Lower operating buffer increases the impact of catalog underperformance or rising fixed costs on profitability and cash flow.

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 generates revenue primarily from (1) recorded music and content exploitation and (2) services provided to third parties. In recorded music, it earns income by investing in and monetizing music catalogs and releases: this includes sales and distribution of physical products (e.g., CDs, vinyl) and income from digital channels such as downloads and streaming where it receives its share after platform and distributor splits under licensing/royalty arrangements. In music publishing, it earns publishing income from copyrights (composer/author and publisher shares) when works are used—e.g., streaming, downloads, broadcast, public performance, and synchronization in film/TV/advertising—typically collected via collecting societies and direct licensing. Separately, Edel earns service revenue by providing manufacturing-related coordination, distribution, warehousing, fulfillment, and related media/logistics services for external labels and content owners; these revenues are generally fee-based and can be supported by long-term client relationships. Key factors affecting earnings include the performance of its catalog (including streaming consumption), demand for physical formats, the ability to acquire/retain attractive rights and artists/catalogs, and the volume of third-party service contracts. Specific significant partnerships: null.

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: Negative

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 5.53, below the 50-day MA of 5.28, and above the 200-day MA of 4.48, indicating a bullish trend. The MACD of 0.12 indicates Positive momentum. The RSI at 59.64 is Neutral, neither overbought nor oversold. The STOCH value of 90.48 is Negative, 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	€14.86M	-7.86	29.87%	4.87%	-0.74%	31.08%
EDL	65 Neutral	€121.06M	3.10	21.56%	6.85%	-0.48%	-13.65%
Sector *	60 Neutral	$48.67B	4.58	-11.27%	4.14%	2.83%	-41.78%
CLIQ	49 Neutral	€16.45M	-0.37	-18.27%	5.87%	―	―
PAL	45 Neutral	€30.57M	-5.29	183.09%	―	―	―