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Evotec Ag (Adr) (EVO)
:EVO
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Evotec AG
(NASDAQ:EVO)
Rating:41Neutral
Price Target:
$3.50
▲(0.29% Upside)
Positive Factors
Cost Management
Evotec accomplished strong cost control this quarter with 37% YoY reduction in R&D and 10% reduction in SG&A expenses.
Revenue Potential
The sale of the Toulouse facility to Sandoz is expected to bolster the balance sheet with a proposed $300M.
Strategic Partnerships
The JEB deal also grants Sandoz access to Evotec’s proprietary biologics development and manufacturing platform through a technology license, which could generate future development revenues, milestones and product royalties.
Negative Factors
Market Challenges
Softness in biotech funding could continue to bite into near-term revenues.
Revenue Expectations
Lower revenue expectations in both the DPD and JEB businesses given the expected soft performance in 2025 and JEB sale.
Segment Performance
Revenue missed estimates due to weakness in the Discovery & Preclinical Development segment.
Evotec AG (EVO) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$1.23B
Dividend YieldN/A
Average Volume (3M)69.00K
Price to Earnings (P/E)―
Beta (1Y)0.82
Revenue Growth-1.03%
EPS Growth8.13%
CountryUS
Employees4,766
SectorHealthcare
Sector Strength45
IndustryDrug Manufacturers - Specialty & Generic
Share Statistics
EPS (TTM)-0.14
Shares Outstanding355,533,080
10 Day Avg. Volume52,655
30 Day Avg. Volume68,997
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)N/A
P/FCF RatioN/A
Enterprise Value/Market Cap1.32
Enterprise Value/Revenue2.09
Enterprise Value/Gross Profit16.22
Enterprise Value/Ebitda-19.42
Forecast
1Y Price Target
$5.83Price Target Upside67.05% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering3
Evotec AG Business Overview & Revenue Model
Company DescriptionEvotec AG is a global leader in drug discovery and development solutions, providing integrated services to pharmaceutical and biotechnology companies. Headquartered in Hamburg, Germany, Evotec operates across multiple sectors within the life sciences industry, including preclinical and clinical drug development, and offers a broad range of services such as target identification, hit discovery, and preclinical development. The company's core offerings include its proprietary technologies, extensive compound libraries, and partnerships with various industry players to advance drug development projects.
How the Company Makes MoneyEvotec generates revenue primarily through a combination of fee-for-service contracts, collaborative research agreements, and milestone payments associated with drug development projects. The company collaborates with pharmaceutical and biotechnology firms, providing customized solutions for drug discovery and development, which are billed on a project basis. Additionally, Evotec earns significant revenue from milestone payments when its partners achieve specific development targets. The company also engages in strategic partnerships and collaborations, which can lead to royalty agreements and profit-sharing arrangements. This diversified revenue model allows Evotec to leverage its expertise and technologies while minimizing risks associated with drug development.
Evotec AG Earnings Call Summary
Earnings Call Date:Aug 13, 2025
(Q2-2025)
| % Change Since: -8.40%|
Next Earnings Date:Nov 05, 2025
Earnings Call Sentiment Neutral
The earnings call displayed a mixed sentiment. While there were strong performances and strategic moves in the Just - Evotec Biologics segment, challenges were apparent in the Discovery & Preclinical Development segment, with revenue declines and a negative group EBITDA. The strategic sale and cost reductions are positive markers, but the overall financial performance and market conditions introduce caution.Q2-2025 Updates
Positive Updates
Just - Evotec Biologics Revenue Growth
Just - Evotec Biologics reported a 16% revenue growth year-over-year, with significant contributions from three large pharma companies and a broadening customer base.
Cost Reduction Achievements
The company has achieved EUR 60 million in cost reductions for 2025, including a 35% reduction in R&D spending and a 50% decrease in CapEx compared to 2024.
Strategic Sale of Toulouse Site
Evotec announced the planned sale of its Toulouse site to Sandoz for around USD 300 million, aligning with its strategy to pivot towards a CapEx-lighter business model.
Molecular Patient Database Expansion
Evotec expanded its molecular patient database to include data from over 27,000 patients, enhancing its precision medicine capabilities and expanding its therapeutic focus.
Positive Outlook on Just - Evotec Biologics
The company remains bullish about the prospects for Just - Evotec Biologics, with plans to strengthen its intellectual property and leadership position in continuous manufacturing.
Negative Updates
Revenue Decline in Discovery & Preclinical Development
The Discovery & Preclinical Development segment saw an 11% revenue decline, partly due to temporary effects in the BMS collaboration and ongoing market softness.
Negative Group EBITDA
Adjusted group EBITDA reached negative EUR 1.9 million, impacted by lower operational leverage from soft revenues in the D&PD segment.
Soft Market for Early-stage Biotech Funding
Continued cautious spending behavior in early-stage R&D, particularly in the U.S. biotech sector, is impacting project flows and funding stability.
Change Orders Affecting Revenue
Higher negative change orders were observed compared to the previous period, mainly due to scientific reasons and strategic decisions by customers.
Company Guidance
During the Evotec SE Half Year Report 2025 Conference Call, the company provided guidance reflecting a mixed performance across their business segments. The Discovery & Preclinical Development (D&PD) segment saw an 11% revenue decline, attributed mainly to a temporary effect in their collaboration with BMS and a softer early drug discovery market. However, Just - Evotec Biologics (JEB) reported a 16% revenue increase year-over-year, driven by strong demand and growth with non-Sandoz and Department of Defense (DOD) customers. The company emphasized their strategic shift towards a more capital-efficient model by planning the sale of their Toulouse site to Sandoz, aiming to enhance their revenue mix and improve profit margins. Despite a 5% decrease in group revenues to EUR 371 million in H1 2025, Evotec maintains their full-year guidance, anticipating a recovery in venture capital funding and an improved business mix in the latter half of the year.Evotec AG Financial Statement Overview
Summary
Evotec AG shows revenue growth but struggles with profitability and cash generation. The income statement indicates declining profitability margins, while the balance sheet remains stable with manageable leverage. Cash flow challenges, particularly 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.40
Negative
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.50
Neutral
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.35
Negative
| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 777.33M | 796.97M | 781.43M | 751.45M | 618.03M | 500.92M |
| Gross Profit | 100.20M | 114.88M | 175.05M | 174.06M | 151.54M | 125.74M |
| EBITDA | -83.70M | -80.66M | 24.13M | -86.08M | 298.41M | 75.50M |
| Net Income | -155.53M | -196.08M | -83.91M | -175.66M | 215.51M | 6.28M |
Balance Sheet | ||||||
| Total Assets | 1.81B | 1.91B | 2.25B | 2.26B | 2.24B | 1.46B |
| Cash, Cash Equivalents and Short-Term Investments | 356.40M | 396.80M | 604.11M | 729.98M | 858.50M | 492.22M |
| Total Debt | 0.00 | 443.54M | 626.20M | 506.67M | 512.92M | 491.96M |
| Total Liabilities | 962.47M | 959.98M | 1.13B | 1.07B | 857.48M | 737.88M |
| Stockholders Equity | 845.79M | 952.52M | 1.12B | 1.19B | 1.38B | 724.46M |
Cash Flow | ||||||
| Free Cash Flow | 12.45M | -114.02M | -179.56M | 21.75M | 3.29M | -54.35M |
| Operating Cash Flow | 111.57M | 18.22M | 36.44M | 203.11M | 122.24M | 44.72M |
| Investing Cash Flow | -52.55M | -71.19M | -13.29M | -415.82M | -243.85M | -155.09M |
| Financing Cash Flow | -15.78M | -161.42M | 71.96M | -52.41M | 398.43M | 246.41M |
Evotec AG Technical Analysis
Negative
3.49
Price Trends
3.97
Negative
3.95
Negative
4.12
Negative
Market Momentum
-0.13
Positive
34.00
Neutral
20.45
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For EVO, the sentiment is Negative. The current price of 3.49 is below the 20-day moving average (MA) of 3.78, below the 50-day MA of 3.97, and below the 200-day MA of 4.12, indicating a bearish trend. The MACD of -0.13 indicates Positive momentum. The RSI at 34.00 is Neutral, neither overbought nor oversold. The STOCH value of 20.45 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for EVO.
Evotec AG Risk Analysis
Evotec AG disclosed 10 risk factors in its most recent earnings report. Evotec AG reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 3 New Risks
1.
Financial risks Q4, 2022
2.
HR risks Q4, 2022
3.
Strategic risks Q4, 2022
Evotec AG Peers Comparison
Overall Rating
UnderperformOutperform
Sector (51)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
73 Outperform | $1.22B | 37.43 | 16.16% | ― | 22.61% | -63.00% | |
68 Neutral | $1.41B | 11.36 | 18.32% | ― | 1.37% | -18.10% | |
66 Neutral | $1.96B | ― | -2.82% | ― | 38.68% | -160.14% | |
61 Neutral | $1.14B | ― | -15.57% | ― | 2.25% | -301.59% | |
52 Neutral | $1.43B | ― | -18.99% | ― | 47.69% | 69.57% | |
51 Neutral | $7.83B | -0.15 | -40.10% | 2.29% | 21.46% | -2.01% | |
41 Neutral | $1.23B | ― | -16.34% | ― | -1.03% | 8.13% |
* Healthcare Sector Average
Performance Comparison
EVO
Evotec AG
3.49
-0.11
-3.06%
PCRX
Pacira Pharmaceuticals
25.99
11.09
74.43%
ANIP
ANI Pharmaceuticals
91.89
29.17
46.51%
AMPH
Amphastar Pharmaceuticals
30.34
-18.22
-37.52%
COLL
Collegium Pharmaceutical
38.58
1.49
4.02%
HROW
Harrow Health
38.57
-0.99
-2.50%
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.