WOOD Flash – GEVORKYAN: 3Q25 mixed, downside risk for our 2025-26E FCFF estimates, no turnaround point expected

GEVORKYAN’s 3Q25 results were mixed, with an EBITDA beat, driven by higher-than-anticipated D&A expenses, but a miss on the net profit line, due to higher tax and a lower net financial result. The company has kept both its 2025E and long-term (2025-29E) guidance unchanged. While there is some upside risk for our EBITDA estimates, on the FCFF, we see the downside risk increasing, due to the higher capex that the company has announced for 2026E. Therefore, the FCFF turnaround point might be delayed to 2027E, as the company needs capex for its new projects, including machines and tools. With negative FCFF generation, GEVORKYAN’s leverage is rising. With the net debt/EBITDA at 3.1x, the ongoing capex cycle, and potential acquisitions ahead, we believe the company is likely to need to secure additional financing. Its cash position of only EUR 0.4m at the end of 3Q25 illustrates that management is stretching the balance sheet and the liquidity management to their limits, in our view. The stock is trading at 9.1x EV/EBITDA and 35x P/E, on our 2025E estimates.