Evotec AG (EVO) AI Stock Analysis

• Market Cap: $1.45B
• Dividend Yield: N/A
• Average Volume (3M): 153.65K
• Price to Earnings (P/E): ―
• Beta (1Y): 0.76
• 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: 355,527,040
• 10 Day Avg. Volume: 178,123
• 30 Day Avg. Volume: 153,647
• PEG Ratio: -3.61
• Price to Book (P/B): 2.79
• Price to Sales (P/S): 0.00
• P/FCF Ratio: -15.86
• 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: 49.63% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 3

• Rating: 53 Neutral
• Price Target: $4.00 ▼(-0.25%Downside)

Evotec AG's overall stock score reflects significant financial challenges, particularly in profitability and cash flow. The technical analysis provides a neutral outlook, while valuation metrics are weak. Earnings call highlights some positives in specific segments and cost savings, but the overall sentiment is mixed due to revenue declines and increased debt.

Positive Factors

Earnings

Solid Just-Evotec Biologics (JEB) revenues of €57M (+65% y/y) were offset by light Shared R&D revenues of €164M (-2% y/y) due to Pharma funding uncertainties impacting demand.

Financial Performance

The company completed the first two steps by closing multiple sites to improve cost efficacy, which delivered annualized recurring gross savings of €40M, and completed the strategic review to 'rebuild' the business model.

Strategic Growth

Expanded collaborations and new customers with the Just-Evotec Biologics segment is helping combat the effects of the soft market environment.

Negative Factors

Investment Impact

Ongoing investments to bring the Toulouse facility fully online will likely offset some of the gains from JEB growth.

Market Environment

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

Revenue Guidance

Pharma spending uncertainty driving lighter shared R&D revs guidance + moderating JEB growth given ramping Toulouse spend with strategic pivot to fewer assets/leaner business driving 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's financial performance is challenged by profitability issues and negative cash flow. Despite revenue growth, declining gross margins, negative EBIT, and net income indicate operational inefficiencies. The balance sheet is stable, but the negative free cash flow poses a risk 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
TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
788.22M	796.97M	781.43M	751.45M	618.03M	500.92M
	Gross Profit
107.35M	114.88M	175.05M	174.06M	151.54M	125.74M
	EBIT
-144.32M	-142.52M	-47.51M	12.49M	27.32M	48.52M
	EBITDA
-149.44M	-80.66M	24.13M	-86.08M	298.41M	75.50M
	Net Income Common Stockholders
-206.98M	-196.08M	-83.91M	-175.66M	215.51M	6.28M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
396.80M	396.80M	604.11M	729.98M	858.50M	492.22M
	Total Assets
1.91B	1.91B	2.25B	2.26B	2.24B	1.46B
	Total Debt
443.54M	443.54M	626.20M	506.67M	512.92M	491.96M
	Net Debt
137.15M	137.15M	115.29M	91.52M	-186.41M	69.80M
	Total Liabilities
959.98M	959.98M	1.13B	1.07B	857.48M	740.05M
	Stockholders Equity
952.52M	952.52M	1.12B	1.19B	1.38B	722.85M
Cash Flow		Free Cash Flow
-80.31M	-114.02M	-179.56M	21.75M	3.29M	-54.35M
	Operating Cash Flow
34.59M	18.22M	36.44M	203.11M	122.24M	44.72M
	Investing Cash Flow
-61.89M	-71.19M	-13.29M	-415.82M	-243.85M	-155.09M
	Financing Cash Flow
-120.12M	-161.42M	71.96M	-52.41M	398.43M	246.41M

Evotec AG Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 4.01
• 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 Neutral. The current price of 4.01 is below the 20-day moving average (MA) of 4.08, above the 50-day MA of 3.81, and above the 200-day MA of 3.97, indicating a neutral trend. The MACD of 0.02 indicates Positive momentum. The RSI at 49.68 is Neutral, neither overbought nor oversold. The STOCH value of 26.14 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for EVO.

Evotec AG Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
AMPH	79 Outperform	$1.23B	9.39	19.90%	―	8.05%	-8.46%
COLL	76 Outperform	$939.52M	24.23	19.23%	―	17.17%	-51.97%
HROW	64 Neutral	$1.08B	―	-37.23%	―	53.49%	33.18%
PCRX	63 Neutral	$1.22B	―	-12.27%	―	3.08%	-247.82%
ANIP	63 Neutral	$1.32B	―	-5.19%	―	30.26%	-173.36%
Sector *	54 Neutral	$5.28B	3.29	-45.38%	2.80%	16.77%	-0.08%
EVO	53 Neutral	$1.45B	―	-20.41%	―	0.45%	-125.61%