Evotec AG (EVO) AI Stock Analysis

• Market Cap: $1.51B
• Dividend Yield: N/A
• Average Volume (3M): 109.68K
• Price to Earnings (P/E): ―
• Beta (1Y): 0.84
• Revenue Growth: 0.45%
• EPS Growth: -125.61%
• Country: US
• Employees: 4,766
• Sector: Healthcare
• Sector Strength: 41
• Industry: Drug Manufacturers - Specialty & Generic
• EPS (TTM): N/A
• Shares Outstanding: 355,533,080
• 10 Day Avg. Volume: 107,774
• 30 Day Avg. Volume: 109,681
• PEG Ratio: 1.16
• Price to Book (P/B): 1.42
• Price to Sales (P/S): 0.00
• P/FCF Ratio: -16.15
• 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: $6.00
• Price Target Upside: 40.85% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 3

• Rating: 43 Neutral
• Price Target: $4.00 ▼(-6.10%Downside)

The overall stock score for Evotec AG is impacted primarily by financial performance challenges, especially in profitability and cash flow. Technical analysis supports a neutral stance, while valuation concerns and mixed earnings call sentiment further weigh down the score.

Positive Factors

Cost Management

The company noted that it has made significant progress on cost out initiatives and expects additional positive impact over the coming quarters.

Growth Strategy

Management refined their new near-term growth strategy favoring higher-margin mix shift, and better-than-expected impacts from the now complete Priority Reset.

Revenue Growth

Guidance of 5-10% revenue growth in 2025 is encouraging.

Negative Factors

Funding Uncertainties

Pharma funding uncertainties are impacting demand, leading to light Shared R&D revenues.

Market Environment

Shared R&D was affected by the overall soft biotech market environment.

R&D Revenues

Weakness in the Shared R&D segment alongside ramping expenses tied to bringing the Toulouse facility online will likely remain an overhang on the near-term outlook.

Evotec AG Business Overview & Revenue Model

Company Description

Evotec SE operates as drug discovery and development partner for the pharmaceutical and biotechnology industry worldwide. The company is developing pharmaceutical products in various therapeutic areas, such as diabetes and complications of diabetes, fibrosis, infectious diseases, CNS diseases, oncology, pain and inflammation, immunology, rare diseases, respiratory diseases, and women's health. It has collaboration agreements with Bayer AG; Lilly; Chinook Therapeutics; Novo Nordisk A/S; Galapagos; Pfizer Inc.; CONBA Pharmaceutical Co., Ltd.; Bristol Myers Squibb Company; Zhejiang JingXin Pharmaceutical Co., Ltd; Kazia Therapeutics; Apeiron Biologics; and Takeda Pharmaceuticals. The company was formerly known as Evotec AG and changed its name to Evotec SE in April 2019. Evotec SE was incorporated in 1993 and is headquartered in Hamburg, Germany.

How the Company Makes Money

Evotec AG generates revenue primarily through its two main business segments: EVT Execute and EVT Innovate. EVT Execute provides fee-for-service agreements where the company undertakes specific research projects for its clients, typically large pharmaceutical companies. This segment is driven by multi-year service agreements and collaborations that ensure a steady income stream. EVT Innovate, on the other hand, focuses on developing its own drug candidates, which are out-licensed to partners at various stages of development. Revenue from this segment is generated through milestone payments, royalties, and licensing fees once the drug candidates are commercialized. Strategic partnerships with major pharmaceutical companies further bolster Evotec's revenue, as they often involve upfront payments, research funding, and profit-sharing arrangements.

Evotec AG Financial Statement Overview

Summary

Evotec AG shows moderate financial health with stable balance sheet but significant challenges in profitability and cash generation. Negative EBIT and net profit margins indicate operational inefficiencies, while declining gross profit margins suggest cost pressures. Cash flow issues, particularly the negative free cash flow, pose risks to financial flexibility.

Income Statement

Evotec AG's income statement reveals challenges in profitability, as highlighted by negative EBIT and net income figures for the recent year, indicating potential operational inefficiencies. Revenue has grown steadily over the years, but gross profit margins have been declining, suggesting increased cost pressures. The negative net profit margin implies that the company is currently not profitable, which is concerning for long-term sustainability.

Balance Sheet

The balance sheet of Evotec AG indicates moderate financial health. The debt-to-equity ratio shows a stable capital structure, with liabilities well-managed in relation to equity. However, there's a declining trend in stockholders' equity and total assets, which might limit future growth opportunities. The equity ratio remains stable, reflecting a balanced financial position despite recent losses.

Cash Flow

Evotec AG's cash flow statement highlights significant challenges in generating positive free cash flow, which has been negative in recent years. The operating cash flow to net income ratio indicates difficulties in converting earnings into cash. The negative trend in free cash flow growth rate raises concerns about the company's ability to fund operations and investments from internal cash generation.

Breakdown	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	796.97M	781.43M	751.45M	618.03M	500.92M
Gross Profit	114.88M	175.05M	174.06M	151.54M	125.74M
EBITDA	-80.66M	24.13M	-86.08M	298.41M	75.50M
Net Income	-196.08M	-83.91M	-175.66M	215.51M	6.28M
Balance Sheet
Total Assets	1.91B	2.25B	2.26B	2.24B	1.46B
Cash, Cash Equivalents and Short-Term Investments	396.80M	604.11M	729.98M	858.50M	492.22M
Total Debt	443.54M	626.20M	506.67M	512.92M	491.96M
Total Liabilities	959.98M	1.13B	1.07B	857.48M	737.88M
Stockholders Equity	952.52M	1.12B	1.19B	1.38B	724.46M
Cash Flow
Free Cash Flow	-114.02M	-179.56M	21.75M	3.29M	-54.35M
Operating Cash Flow	18.22M	36.44M	203.11M	122.24M	44.72M
Investing Cash Flow	-71.19M	-13.29M	-415.82M	-243.85M	-155.09M
Financing Cash Flow	-161.42M	71.96M	-52.41M	398.43M	246.41M

Evotec AG Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 4.26
• 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 EVO, the sentiment is Positive. The current price of 4.26 is above the 20-day moving average (MA) of 4.12, above the 50-day MA of 4.10, and above the 200-day MA of 4.09, indicating a bullish trend. The MACD of -0.03 indicates Positive momentum. The RSI at 55.61 is Neutral, neither overbought nor oversold. The STOCH value of 56.02 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for EVO.

Evotec AG Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
COLL	75 Outperform	$1.02B	26.19	19.23%	―	17.17%	-51.97%
ANIP	75 Outperform	$1.46B	―	-5.19%	―	30.26%	-173.36%
AMPH	68 Neutral	$1.05B	8.12	19.90%	―	8.05%	-8.46%
HROW	61 Neutral	$1.33B	―	-37.23%	―	53.49%	33.18%
PCRX	60 Neutral	$1.04B	―	-12.27%	―	3.08%	-247.82%
Sector *	50 Neutral	AU$2.61B	2.94	-57.47%	2.40%	36.37%	14.48%
EVO	43 Neutral	$1.51B	―	-20.41%	―	0.45%	-125.61%