Materialise FY22 top-line in line, EBITDA just below its own guidance

We think Materialise's stock overreacted on the FY22 EBITDA small shortfall versus the guidance. We maintain our Buy and our new Target Price of $16 is in line with our (DCF and peer group) valuation in our updated model.

We take into account that Materialise expects in FY23 to post another year of double-digit revenue growth, with revenues totalling between € 255m and € 260m (KBCSe +/- stable at € 258.2m). As in FY22, Materialise expects its Medical segment and Manufacturing segment to be the main drivers of that growth. While they expect sales of its Materialise Software segment will also grow, this growth may not be fully reflected in the segment's revenues due to the changing cloud-based subscription business model Materialise is introducing there. Assuming that inflation stabilizes in FY23,
Materialise expects its continued revenue growth to gradually result in a stronger FY23 Adj. EBITDA, which they currently anticipate to total between € 25m and € 30m. Materialise expects its three segments to contribute to its Adjusted EBITDA in line with their contributions to their revenue growth.