SRH AlsterResearch AG Initiation: Atoss Software AG - Quality company, but detached valuation; SELL

Atoss Software AG (Initiation)

Technology

MCap EUR 1.5bn

SELL, PT EUR 153.00 (-18% potential)
Research update

ATOSS is a quality company, delivering strong organic growth rates with attractive margins. The well-established provider of workforce management solutions in the DACH-region consistently outperformed its market with a revenue growth of 14% and EBIT growth of 18% p.a. from 2014-2020. The company is set to drive structural growth by a transition of the provision model from traditional licensing to a SaaS-model to increase the share of recurring revenues. At the same time, ATOSS expands into new markets beyond the DACH-region. Investments are thereby ramped up, dampening the margin development. Despite the promising growth perspective, we believe ATOSS is overvalued. With a high valuation relative to its peer group and based on a DCFvaluation we initiate coverage with a price target of EUR 153.00 and a SELL recommendation.

 

For 5 current investment ideas, check our Weekly Screener. This week we are looking for stocks that offer growth at a reasonable price.

 

Please note that AlsterResearch publishes MiFID II compliant research only. For a detailed discussion on MiFID II, please visit https://www.research-hub.de