After a record-breaking year 2019, the shares broke the course within the first two months of this trading period by about a third and is listed at present, only at 84,00 Euro (18.02.2020, applicable to all courses). The times of three-digit classes would seem to be, therefore, at least for the moment over. VARTA 87,10 EUR -0,50 (-0,57%) Xetra
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the course data
The latest quarterly figures for the battery specialists, however, marked once again by strong growth, as we will see in a moment. But is that enough, will re-rate to stand out technically? An exciting question that we want to go in the Following on the base:
The views of the Figures,
such As Varta now for the past fiscal year 2019, have been blown up the previous forecasts even further. Within this twelve-month period, the battery manufacturer was able to produce a turnover in the amount of 364 million Euro, representing year on year growth of 34 percent. Adjusted EBITDA, however, increased in year-on-year by say 95 per cent-like to EUR 98 million, according to the provisional Figures presented to the Management within the week. Especially the profit growth shows these days, how dynamic this growth story.
In the run-up to and after the three forecast increases in the last months, the Management still expected only with a turnover of up to 340 million euros, while profit was, however, a value of 88 million Euro. This forecast was duped with the figures now, once more, which could also suggest a certain Momentum.
nevertheless, the share does not come, in spite of these Figures, in the swing. Why? A good question that should occupy us more in detail Below. Since it is possible that there could be some solid reasons why Varta is currently course technically on the spot.
The current job sites
A first site, the evaluation of this dynamic growth story, for example. With growth rates of almost three percentage, in particular, profit growth, Varta certainly one of the greater success story of the last few months. However, the performance measure is still alarmingly high.
the market capitalization, for example, is 3.4 billion Euro, which means that Varta is currently valued at more than nine times the sales. The EBITDA multiplier is, however, on a 34.7-Fold, where we should at this point stress that it is the net profit, but merely to the operating result. Quite an expensive performance measure, which should still have priced in a greater part of the future prospects evaporated.
Which are, in turn, have been lately, it’s not all sunshine and roses embossed. More critical reports and votes, in particular with regard to the competition, have proved in the last few weeks and months, more often as a price brake. May be Varta, so the analyses are not able to serve the high demand in some of the prominent large customers, which could potentially lead to losses in market shares. And to be more competitive in the international market, where we also should mention that Varta has a lot of popular Know-how in his Segment.
The growth, but the scepticism brakes
the Bottom line is that the Varta-share is therefore accepted in these days is a double-edged image. In operational terms, the growth is true in the market of battery solutions, as a glance at the provisional figures revealed very impressive. However, the rating is still high, and further, medium-term prospects could be impacted by the topic of competition for large customers.
Perhaps it is therefore time to examine the competitive advantage of Varta, to find out whether the tradition will be able to enforce German battery group in the long term. If Yes, might be the lower share prices, of course, in view of the mega market welcoming. Yes, even in spite of the high valuation, the stock currently, as in this case, the long-term potential, given the still comparatively low market seems to be capitalisation is not yet fully priced in.
Disclaimer: Vincent has none of the mentioned shares.
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*The contribution of “Operationally, it runs at Varta: Is the stock to be back in rally mode?” is published by Fool.de. Contact with the executives here.
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