WOOD Flash - GEVORKYAN: strong 1Q25 - EBITDA 15% above our expectations; 2025E conservative guidance

GEVORKYAN has reported strong 1Q25 results, which exceeded our expectations, with EBITDA of EUR 8.4m, 15% above our estimate, and net profit of EUR 3.0m, double our forecast. The company achieved a record-high EBITDA margin of 40%, reflecting efficiency gains in lower costs of materials and energy. Despite the strong start to the year, GEVORKYAN maintained a conservative outlook, guiding for 2025E revenue growth of 9% yoy and an EBITDA margin of c.32%. In our view, this is cautious, particularly given that it delivered EBITDA margins of c.34-35% in 2023 and 2024, respectively. We also view the long-term margin (2025-29E) guidance of c.32% as conservative. As of today, 94% of the 2025E revenues are secured under signed contracts and, with increasing exposure to higher-margin segments such as defence, oil & gas, aviation, and marine, we believe the company has the potential to outperform its own guidance. Management has indicated that many of these new contracts should achieve EBITDA margins above 30%, with some exceeding 35%. At current levels, the stock trades at 9.2x 2025E EV/EBITDA, based on the company’s EBITDA guidance.