Equasens : e-health pure player with modest valuation

Equasens provides IT solutions and software for the healthcare industry. Historically positioned in the pharmacy segment (market leader in France, >40% market share), its global expansion (Italy, Germany) and business diversification (nursing homes, hospitals, private practitioners, etc.), should facilitate the return to a dynamic growth trajectory (2025-28 CAGR estimated at +7%) after two challenging years. Given the necessary investments (R&D, salesforce), we believe 2025 will mark a low for margins, and that Equasens will gradually return to an underlying operating margin close to 25% in 2028. On the back of solid FCF generation (FCF/revenue 18%) and net cash surplus, Equasens should push forward with its bolt-on acquisition strategy (2-3 per year) and maintain an aggressive dividend (yield estimated at ~3%). After a turbulent stock market performance (-17% over a year), the entry point is attractive: modest valuation (EV/EBIT c. 11.3x 2025e and 9.8x 2026e), positive risk reward. We are initiating coverage of the stock with an Outperform rating and a target price of € 56.