Avemio AG: Strategic Shift and Profit Margin Improvement Expected

GBC AG has issued a research report on Avemio AG, recommending a BUY rating with a target price of €23.00 by the end of 2025. Avemio AG, listed under ISIN DE000A2LQ1P6, saw revenue decrease to €99.15 million for the financial year 2023, below its expected €120 million. This decline is attributed to lower demand, especially for high-priced equipment, and a lack of innovation in the market.

EBITDA for 2023 was negative at € -0.05 million, missing the Avemio guidance of € 5 million. Despite stable gross profit margins, operating expenses rose significantly. Expansion of personnel and increased product development costs contributed to this rise.

Avemio projects a modest sales growth of 1% to 4% for 2024, with an anticipated break-even EBIT. Sales in media technology are expected to rise, driving the company's strategy to improve customer loyalty and earnings quality. The acquisition of MoovIT GmbH is a significant step in this direction.

For 2024, Avemio forecasts sales revenue to hit € 101.14 million, anticipating a 7.0% annual growth in subsequent years. Cost-cutting measures are expected to positively impact the EBIT margin, improving to 6.1% by 2026. The reduced target price reflects lowered expectations for long-term EBITDA margin, now set at 10.0%.