SOFTWARE AG: Slower bookings in Digital are no headache | BUY | EUR38 VS. EUR46
SOFTWARE AG - BUY | EUR38 VS. EUR46 (+34%)Slower bookings in Digital are no headache
We reiterate our Buy rating but adjust our DCF-derived target price to EUR38 from EUR46 incorporating an economic slowdown in the coming quarters. Software AG has reported Q2 2022 earnings ahead of expectations, confirmed revenue and operating margin guidance for 2022 and 2023, but reduced Digital Business bookings guidance amid longer sales cycles. However, the demand environment remains solid for integration software, the rationale behind the Helix programme launched in 2019 is still valid, and we consider management has made the right choices with the Silver Lake partnership and the StreamSets acquisition
Software is a holdinc company. Co. is engaged as a provider of process and integration software. Co.'s operates through three reporting lines: business process management or Business Process Excellence (BPE), data management or Enterprise Transaction Systems (ETS) and Consulting. The BPE segment consists of software products for integrated solutions in the field of Business Process Management for organizations of all industries and sizes. The ETS segment is engaged in providing database solutions for mainframes and the development of mainframe-based IT systems. The Consulting segment includes all consulting and services pertaining to the BPE, ETS and IDS Scheer Consulting business lines.
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