Ascopiave S.p.A. (ASC) AI Stock Analysis

• Market Cap: €659.88M
• Dividend Yield: 4.87%
• Average Volume (3M): 116.90K
• Price to Earnings (P/E): 7.9
• Beta (1Y): 0.26
• Revenue Growth: 9.09%
• EPS Growth: 98.81%
• Country: IT
• Employees: 446
• Sector: Utilities
• Sector Strength: 87
• Industry: Regulated Gas
• EPS (TTM): 0.26
• Shares Outstanding: 234,411,580
• 10 Day Avg. Volume: 119,791
• 30 Day Avg. Volume: 116,903
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• 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: €3.64
• Price Target Upside: 19.74% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 4

• Rating: 73 Outperform
• Price Target: €3.50 ▲(15.13% Upside)

Ascopiave S.p.A. has a strong financial performance with high profitability and revenue growth, but faces challenges with declining free cash flow and increasing debt. The technical analysis suggests a neutral trend, while the valuation indicates potential undervaluation with a high dividend yield. These factors collectively result in a moderate overall stock score.

Positive Factors

Asset Value

The current share price implies a significant undervaluation to the asset base of the company.

Financial Performance

Net profit reached €55.8m, five times higher than €11.2m in 2Q24.

Strategic Acquisitions

Ascopiave's interest in a portion of Italgas/2i Rete Gas’ remedies, worth a total of around EUR 0.6Bn, shows potential for further strategic acquisitions.

Negative Factors

Debt Levels

Net debt at the end of the period increased to €590m from €388m at end 2024.

Dividend Appeal

Limited room for upside on fair RAB multiples and not as much tempting dividend yield.

Renewables Performance

The underlying operating performance was flat in gas distribution and mildly lower in renewables, due to the decline in allowed returns and hydro production volumes.

Ascopiave S.p.A. Business Overview & Revenue Model

Company Description

Ascopiave S.p.A. (ASC) is an Italian company primarily involved in the energy sector, focusing on the distribution of natural gas and the provision of energy services. The company operates in the regulated utilities sector and provides services related to the management and maintenance of gas distribution networks. Ascopiave serves a diverse range of customers, including residential, commercial, and industrial clients, ensuring reliable and efficient energy supply.

How the Company Makes Money

Ascopiave generates revenue primarily through the distribution of natural gas, which is regulated by national authorities. The company earns money by charging fees to customers for gas distribution services, which are based on the volume of gas delivered and the network's operational costs. Additionally, Ascopiave may have revenue streams from energy efficiency services, consultancy, and maintenance services that complement its core gas distribution business. Strategic partnerships with energy suppliers and collaborations in energy efficiency projects can also contribute to its earnings. The company’s financial performance is influenced by regulatory frameworks, energy demand, and its operational efficiency.

Ascopiave S.p.A. Financial Statement Overview

Summary

Ascopiave S.p.A. demonstrates strong revenue growth and profitability, supported by high margins and a stable balance sheet. However, the decline in free cash flow growth and increasing debt levels warrant attention. Overall, the company is performing well but should focus on improving cash flow generation to sustain its growth trajectory.

Income Statement

Ascopiave S.p.A. shows strong revenue growth with a TTM (Trailing-Twelve-Months) revenue growth rate of 70.5%, indicating robust expansion. The company maintains high profitability with a gross profit margin of 87.23% and a net profit margin of 38.86% in the TTM period. EBIT and EBITDA margins are also strong at 50.24% and 74.16%, respectively. However, the gross profit margin has slightly decreased from the previous year, suggesting potential cost pressures.

Balance Sheet

The balance sheet reflects a stable financial position with a debt-to-equity ratio of 0.74 in the TTM period, indicating moderate leverage. Return on equity is improving, reaching 9.69% in the TTM period, showing enhanced profitability. The equity ratio remains healthy, suggesting a solid equity base. However, the increase in total debt over the years could pose a risk if not managed carefully.

Cash Flow

Cash flow analysis reveals a decline in free cash flow growth, with a significant drop of 57.19% in the TTM period. The operating cash flow to net income ratio is 0.51, indicating moderate cash generation efficiency. The free cash flow to net income ratio is 0.28, suggesting that a portion of earnings is being converted into free cash flow. The negative free cash flow growth is a concern and could impact future liquidity.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	213.80M	204.96M	180.79M	163.65M	134.91M	163.90M
Gross Profit	186.50M	194.91M	106.57M	109.81M	104.49M	125.34M
EBITDA	158.55M	108.09M	100.97M	82.30M	69.87M	66.79M
Net Income	83.09M	35.82M	36.18M	32.66M	45.33M	58.70M
Balance Sheet
Total Assets	1.71B	1.45B	1.46B	1.65B	1.37B	1.36B
Cash, Cash Equivalents and Short-Term Investments	59.84M	35.00M	53.83M	77.74M	43.45M	22.70M
Total Debt	652.11M	425.60M	447.77M	464.11M	393.04M	362.69M
Total Liabilities	819.29M	594.53M	607.70M	761.21M	502.05M	509.20M
Stockholders Equity	886.21M	847.97M	844.75M	866.28M	868.54M	853.90M
Cash Flow
Free Cash Flow	32.67M	20.11M	-81.45M	11.62M	-2.28M	-2.27M
Operating Cash Flow	116.79M	101.18M	6.13M	98.52M	42.16M	42.16M
Investing Cash Flow	-268.00M	-67.60M	25.84M	-83.28M	-91.78M	-113.03M
Financing Cash Flow	182.99M	-51.49M	-80.02M	19.14M	4.49M	25.74M

Ascopiave S.p.A. Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 3.04
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For IT:ASC, the sentiment is Negative. The current price of 3.04 is below the 20-day moving average (MA) of 3.12, below the 50-day MA of 3.07, and above the 200-day MA of 2.85, indicating a neutral trend. The MACD of <0.01 indicates Positive momentum. The RSI at 41.71 is Neutral, neither overbought nor oversold. The STOCH value of 35.82 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for IT:ASC.

Ascopiave S.p.A. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
IG	79 Outperform	€7.49B	13.32	20.21%	5.11%	-3.34%	8.88%
SRG	75 Outperform	€17.15B	12.27	17.62%	5.65%	-8.04%	30.49%
ASC	73 Outperform	€659.88M	7.93	9.67%	4.87%	9.09%	98.81%
IRE	73 Outperform	€3.24B	10.54	9.99%	5.06%	13.50%	19.36%
ACE	71 Outperform	€4.15B	10.73	14.47%	4.87%	-15.51%	19.61%
A2A	68 Neutral	€6.64B	8.03	16.17%	4.67%	2.73%	6.02%
Sector *	67 Neutral	$17.90B	18.84	8.18%	3.40%	7.32%	12.41%