Edison Investment Research Initiates Coverage on AUSTRIACARD: A Promising Future Ahead

On April 5, 2024, Edison Investment Research Limited released a comprehensive initiation report on AUSTRIACARD (ACAG), a company with a significant background in providing secure solutions for smart card provision and document management in Europe. The report underlines AUSTRIACARD's strategic expansions through both organic growth and acquisitions to enhance its offerings in digital transformation technology. This includes a noteworthy franchise with challenger banks, alongside the development of innovative digital solutions aimed at aiding customers through their digital transformation endeavors.

Edison's analysis forecasts a robust growth trajectory for the challenger bank sector, along with increased adoption of digital solutions and value-added services in the smart card market. These industry dynamics are expected to fuel revenue growth and margin expansion for AUSTRIACARD over the forecast period. The research further deliberates on AUSTRIACARD's limited competition within the smart card industry, pointing out the significant potential for financial and valuation gains, particularly through the successful commercialization of its proprietary technology.

The report employs a discounted cash flow (DCF) model, projecting conservative revenue growth of 3% extending to FY33 and stable EBITDA margins from FY27 onwards. The analysis culminates in a valuation of €10.0 per share, indicating a 57% upside from the current share price. This initiation not only highlights AUSTRIACARD's solid position within its industry but also underscores the prospective benefits of its strategic direction in digital transformation.