ESI Group: Stratospheric multiples
Who says ESI Group is overvalued? The share price of the small software company specializing in virtual prototyping has double since the bottom of the Covid crisis, but its large competitors in Europe and the US performed as well, or even better. ESI Group is trading at just over 21x its EBITDA 2021 but Dassault Systèmes, is valued at 31x its EBITDA. On the same multiple, its American competitors Ansys and Altair are respectively trading at 41x and 111x. The PLM and virtual prototyping software industry undoubtedly has a great future ahead of it, but are these valuations multiples justified? We don’t think so, in particular for ESI Group.
ESI Group is engaged in researching, developing, designing, creating and distributing computer software; and acquiring, receiving, holding, managing and trading in a portfolio of securities, especially in fields related to the publishing of scientific software, including digital simulation software for prototyping and manufacturing processes and related decision-making support tools.
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