SOFTWARE AG - SELL | EUR33 vs. EUR36 (-4%) The impact of the move to subscriptions to revenues is not yet stabilised We reiterate our Sell rating and cut our target price to EUR33 Faster move to subscriptions causes timing issues on revenues The low-end of the 20-22% margin range is more likely in 2020 Costs related to the malware attack will be limited at this stage
SOFTWARE AG - SELL | EUR36(0%) Bookings exceed expectations but revenues are affected by transformation Bookings were solid but revenues disappointed in Q3 The switch to subscriptions accelerated the DBP revenue decline We reiterate our Sell rating
Software-as-a-service is the main reason why software valuation multiples keep rising. North America is well advanced in this move, and Europe follows with a growing number of SaaS players going public and on-premise vendors moving to SaaS or subscriptions, attracted by the resilience of these models. We expect SaaS IPOs and M&A to accelerate, and SAP is our preferred SaaS player in Europe.
Software, IT & High Tech services New rating system: Atos upgraded to Conviction Buy, Nemetschek upgraded to Buy Significant growth and margin potential drives Conviction Buys We upgrade Atos to Conviction Buy from Buy We upgrade Nemetschek to Buy from Neutral Economic recovery and cost cutting play for a positive stance
SOFTWARE AG - SELL | EUR34 vs. EUR29 (-15%) Subscriptions are successful, but valuation is quite demanding The move to subscriptions is successful Helix translates into better competitiveness and sales momentum Acquisitions likely to resume soon Sell reiterated but we raise our Fair Value to EUR34 from EUR29
SOFTWARE AG - SELL | EUR29(-24%) Transformation continued in Q2 2020 in an uncertain backdrop Bookings solid in Q2, revenues burdened by transformation As pretty much usual, Adabas & Natural saved the quarter H1 bookings were encouraging, but risks of slowdown persist Transformation to subscriptions is still in progress
SOPRA STERIA GROUP - BUY | EUR143(+38%) Q1 2020 sales above estimates, no surprise on H1 2020 guidance Q1 2020 revenues were slightly ahead of expectations Solid performance in Scandinavia and at Sparda-Bank H1 2020 guidance in line with our expectations
SOFTWARE AG - NEUTRAL | EUR25 Q1 2020 results above estimates, FY20 bookings guidance lowered Q1 2020 results were ahead of our forecasts and the consensus Adabas & Natural and IoT exceeded revenue expectations FY20 bookings guidance is lowered, but margin is unchanged We expect a positive reaction in the short term
SOFTWARE AG - NEUTRAL | EUR29 CMD feedback: more clarity on the means to meet 2023 targets Work in progress, but results yet to be seen Better financial communication on subscriptions has been made The new sales approach needs to stay efficient over time Solid progress has been made in hybrid integration and IoT
SOFTWARE AG - NEUTRAL | EUR29 vs. EUR35 (0%) FY19 call feedback: transition year now there, let’s wait for progress Management has properly done the job on the first year of Helix Getting more revenues by 2023 means more operating costs Spanish Consulting is expected be sold during the summer Our new Fair Value reflects the deteriorating earnings momentum
SOFTWARE AG - NEUTRAL vs. BUY | Under Review FY19 results globally in line, FY20 and mid-term margin goals disappoint FY19 results were globally in line with the consensus IoT/Cloud disappointed as deals expected for Q4 were delayed More investment pushes FY20 and mid-term margins downwards
SOFTWARE AG - BUY | EUR35 vs. EUR33 (+20%) Q3 2019 call feedback: prepared for the switch to subscriptions Adabas & Natural is now expected at the high-end of the range Operating margin may be more impacted by Helix in 2020 Software AG is ready for the conversion to subscriptions We raise our Fair Value to EUR35 from EUR33
SOFTWARE AG - BUY | EUR33 Q3 2019 results way ahead of estimates; FY19 guidance reiterated Q3 2019 results were way ahead of expectations DBP is recovering, while A&N was boosted by early deal closings FY19 guidance is reiterated and is now easier to achieve
SOFTWARE AG - BUY | EUR33 vs. EUR42 (+28%) Q2 2019 call feedback: a more realistic turnaround scenario Software AG is rebuilding sales and marketing in North America DBP’s refocus is under way under Project Helix The dynamic is solid on IoT and hybrid integration We cut our DCF-derived Fair Value to EUR33 from EUR42
SOFTWARE AG - BUY | EUR42 Prelim. Q1 2019 results exceed expectations, A&N sales guidance raised Q1 2019 was above expectations, but still reflects a mixed picture Stellar performance on A&N, deal slippages on DBP FY19 guidance on A&N is raised
SOFTWARE AG - BUY | EUR42 Capital Markets Day feedback: mitigating transition risks Helix is all about selling more and reinvigorating growth The “Fish Model†looks likely to be soft The partner ecosystem will be key for success New top managers bring credibility to the new strategy
SOFTWARE AG - BUY | EUR42 vs. EUR50 (+32%) FY18 call feedback: a deep multi-year transformation Project Helix remakes the “Fish Model†The goal is to capture the full potential of the DBP business Organic growth first, but acquisitions are welcome Buy reiterated but we cut our Fair Value to EUR42 from EUR50
SOFTWARE AG - BUY | EUR50 FY18 results in line, Project Helix will impact margins short-term FY18 results globally in line with consensus A&N exceeds expectations and DBP is still below guidance Project Helix accelerates transformation but impacts profitability FY19 guidance reflects additional investment in the business
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