OVH Groupe SAS (OVH) AI Stock Analysis

• Market Cap: €1.61B
• Dividend Yield: N/A
• Average Volume (3M): 126.48K
• Price to Earnings (P/E): 139.7
• Beta (1Y): -0.20
• Revenue Growth: 10.48%
• EPS Growth: N/A
• Country: FR
• Employees: 3,018
• Sector: Technology
• Sector Strength: 87
• Industry: Software - Infrastructure
• EPS (TTM): 0.05
• Shares Outstanding: 151,651,540
• 10 Day Avg. Volume: 194,751
• 30 Day Avg. Volume: 126,483
• PEG Ratio: -1.11
• Price to Book (P/B): 4.35
• Price to Sales (P/S): 0.00
• P/FCF Ratio: -63.92
• 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: €10.63
• Price Target Upside: -0.65% Downside
• Rating Consensus: Moderate Sell
• Number of Analyst Covering: 4

• Rating: 50 Neutral
• Price Target: €11.50 ▲(7.48%Upside)

OVH Groupe SAS faces significant challenges with its high leverage and lack of profitability, impacting its financial performance score. Technical indicators show bearish momentum, contributing to a lower technical analysis score. The high P/E ratio suggests potential overvaluation, further affecting the overall score. The absence of earnings call data limits insights into management's outlook and guidance.

Positive Factors

Industry Trends

Expected to benefit from trends around multi-cloud and growing concerns around data sovereignty and privacy.

Market Position

OVH is viewed as a challenger in a large and growing private and public cloud market.

Negative Factors

Financial Performance

The public buyback offer is fully financed by debt, leading to a rise in leverage from c.2x to c.3x and a sharp reduction in free float, increasing the company's risk profile.

OVH Groupe SAS Business Overview & Revenue Model

Company Description

OVH Groupe SAS provides public and private cloud, shared hosting, and dedicated server products and solutions worldwide. The company offers Bare Metal Cloud, an instant provisioning and automated access to dedicated servers; Hosted Private Cloud, which are software defined data center services; Public Cloud that provides computing services on shared servers; and web cloud services to help individuals and companies to start and enhance their digital journey. It also offers domain name registration, telephony, and internet access services. The company operates approximately 400,000 servers within 33 data centers. OVH Groupe SAS was founded in 1999 and is based in Roubaix, France.

How the Company Makes Money

OVH makes money primarily through its comprehensive suite of cloud services, which includes web hosting, cloud computing, and dedicated server solutions. These services are offered on a subscription basis, where customers pay for the hosting or cloud resources they use. OVH generates revenue by providing scalable infrastructure as a service (IaaS) and platform as a service (PaaS) solutions, which allow businesses to deploy and manage applications efficiently. The company also partners with technology providers and integrators to enhance its service offerings and expand its market reach. Additionally, OVH's focus on energy-efficient data centers and competitive pricing helps attract a diverse customer base, contributing to its earnings.

OVH Groupe SAS Financial Statement Overview

Summary

OVH Groupe SAS demonstrates strong revenue growth and operational improvements, yet struggles with profitability and high leverage. Cash flow management remains a strength, but financial risk from debt levels requires careful monitoring. The company should focus on improving margins and reducing dependency on debt to enhance financial stability.

Income Statement

The company has shown consistent revenue growth over the years, with a 10.7% increase in 2024 compared to the previous year. However, their net profit margin is negative, indicating a challenge in converting revenue into profit. The EBIT margin has improved, suggesting better operational efficiency, yet the company remains unprofitable overall.

Balance Sheet

OVH Groupe SAS has a high debt-to-equity ratio of approximately 2.19, indicating significant leverage which could pose financial risks. The return on equity is negative due to net losses, while the equity ratio is relatively low at about 23.5%, reflecting higher reliance on debt for financing.

Cash Flow

Positive free cash flow indicates good cash generation, though growth in free cash flow remains volatile. The operating cash flow to net income ratio is strong, suggesting efficient cash management despite net losses. However, the free cash flow to net income ratio is less reliable due to negative net income.

Breakdown	TTM	Sep 2024	Sep 2023	Sep 2022	Sep 2021	Sep 2020
Income Statement
Total Revenue	1.01B	993.05M	897.30M	788.00M	663.31M	632.12M
Gross Profit	743.44M	728.80M	542.40M	421.86M	345.26M	346.19M
EBITDA	295.27M	368.37M	301.45M	261.27M	233.53M	239.19M
Net Income	1.47M	-10.30M	-40.32M	-28.55M	-32.34M	-11.31M
Balance Sheet
Total Assets	1.72B	1.67B	1.60B	1.44B	1.25B	1.06B
Cash, Cash Equivalents and Short-Term Investments	35.78M	40.92M	49.00M	36.19M	53.61M	90.84M
Total Debt	875.65M	861.40M	783.86M	603.94M	762.24M	666.40M
Total Liabilities	1.32B	1.28B	1.19B	974.40M	1.15B	934.75M
Stockholders Equity	402.33M	392.99M	410.98M	468.35M	105.61M	120.38M
Cash Flow
Free Cash Flow	20.49M	25.10M	-27.95M	-179.32M	-75.01M	-9.85M
Operating Cash Flow	376.25M	368.21M	329.84M	274.12M	268.22M	270.44M
Investing Cash Flow	-368.28M	-369.28M	-357.78M	-469.06M	-354.49M	-299.90M
Financing Cash Flow	-22.01M	-7.05M	41.84M	176.46M	54.61M	90.96M

OVH Groupe SAS Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 10.70
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Positive
• MACD: Positive
• RSI: Positive
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For FR:OVH, the sentiment is Negative. The current price of 10.7 is below the 20-day moving average (MA) of 12.65, below the 50-day MA of 12.92, and above the 200-day MA of 9.39, indicating a neutral trend. The MACD of -0.78 indicates Positive momentum. The RSI at 29.94 is Positive, neither overbought nor oversold. The STOCH value of 10.51 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for FR:OVH.

OVH Groupe SAS Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
OVH	50 Neutral	€1.61B	139.69	6.29%	―	10.48%	―
Sector *	49 Neutral	C$2.97B	2.15	-83.78%	2.54%	12.97%	-24.70%
0QAU		€18.93M	―	-8.76%	―	―	―
0QVI		€1.07B	―	-3.53%	―	―	―
9LH		€72.30M	9.46	21.37%	―	―	―
3WG		€150.02M	―	-35.30%	―	―	―
MLMFI		€27.83M	―		―	―	―

OVH Groupe SAS Corporate Events

OVHcloud Enhances Data Resilience with New Object Storage Solution in Paris

OVHcloud has launched its Object Storage Standard 3-AZ in the Paris region, enhancing data resilience by distributing data across three availability zones. This deployment model is designed to prevent service interruptions, offering a 99.99% SLA and robust data protection features. It aims to serve critical cloud workloads across various industries, ensuring data safety even in case of an availability zone failure.

OVHcloud Secures €950 Million in Refinancing with Historic Green Loan

OVHcloud has successfully completed its refinancing, highlighted by the issuance of a €500 million bond and securing a €450 million EU Taxonomy-aligned Green Loan. These moves diversify their funding sources and position them as the first European cloud player to secure such a green loan, showcasing their commitment to sustainability and strengthening their market position.

OVH Groupe S.A. Issues €500 Million in Bonds to Bolster Financial Stability

OVH Groupe S.A. announced the issuance of 500 million euros in senior unsecured bonds due in 2031 with a fixed annual rate of 4.75%, aimed at refinancing existing debt and supporting general business needs. This move is expected to strengthen the company’s financial stability and bolster its position in the competitive cloud services market.

OVH Groupe Reduces Share Capital by Cancelling Treasury Shares

OVH Groupe announced a significant reduction in its share capital by cancelling 38,888,889 treasury shares, which represents approximately 20.41% of its share capital. This action, completed on January 29, 2025, is part of a strategic share buyback offer, aiming to optimize its financial structure and potentially improve shareholder value, thereby reinforcing its market position.

OVH Groupe Releases Q1 2025 Financials and Announces New Financing

OVH Groupe has published its unaudited financial statements for the first quarter ending November 30, 2024, along with announcing a new financing agreement to support its share buyback initiative. This strategic financial move, involving a significant reduction in share capital, aims to optimize the company’s financial structure and enhance its market position by refinancing existing debts and addressing general financial needs.