Evotec AG (EVO) AI Stock Analysis

• Market Cap: $1.37B
• Dividend Yield: N/A
• Average Volume (3M): 119.02K
• Price to Earnings (P/E): ―
• Beta (1Y): 1.06
• Revenue Growth: 0.45%
• EPS Growth: -125.61%
• Country: US
• Employees: 4,766
• Sector: Healthcare
• Sector Strength: 50
• Industry: Drug Manufacturers - Specialty & Generic
• EPS (TTM): -0.63
• Shares Outstanding: 355,527,040
• 10 Day Avg. Volume: 164,735
• 30 Day Avg. Volume: 119,022
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): 0.00
• Price to Cash Flow (P/CF): 0.00
• P/FCF Ratio: 0.00
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $7.50
• Price Target Upside: 74.42% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 2

Evotec AG's overall stock score reflects a company with notable financial challenges, especially in profitability and cash generation. Technical analysis shows positive market momentum, providing some optimism. The valuation is impacted by lack of profitability, and while the earnings call indicates some positive developments, risks remain with declining revenues and increased debt levels. The company needs to focus on improving profitability and cash flow to enhance its financial health and investor appeal.

Positive Factors

Cost Savings

Significant progress on cost out initiatives is expected to have an additional positive impact over the coming quarters.

Growth Momentum

Just-Evotec Biologics continues growth momentum, driven by orderbook strength bolstered by expansion of existing customer assets and signing of new partnerships.

Negative Factors

Market Environment

Shared R&D was affected by the overall soft biotech market environment, leading to reduced revenues.

Pharma Funding

Pharma funding uncertainties are impacting demand, resulting in lighter Shared R&D revenues.

Evotec AG Business Overview & Revenue Model

Company Description

Evotec AG is a globally operating biotechnology company headquartered in Hamburg, Germany. The company focuses on drug discovery and development, providing integrated research solutions to the pharmaceutical and biotechnology industries. Evotec operates through various segments such as EVT Execute and EVT Innovate, offering services ranging from target identification to pre-clinical and clinical development. Its core services include screening, medicinal chemistry, in vitro and in vivo pharmacology, as well as development of biologics.

How the Company Makes Money

Evotec AG generates revenue primarily through its two main business segments: EVT Execute and EVT Innovate. EVT Execute provides fee-for-service agreements where the company undertakes specific research projects for its clients, typically large pharmaceutical companies. This segment is driven by multi-year service agreements and collaborations that ensure a steady income stream. EVT Innovate, on the other hand, focuses on developing its own drug candidates, which are out-licensed to partners at various stages of development. Revenue from this segment is generated through milestone payments, royalties, and licensing fees once the drug candidates are commercialized. Strategic partnerships with major pharmaceutical companies further bolster Evotec's revenue, as they often involve upfront payments, research funding, and profit-sharing arrangements.

Evotec AG Financial Statement Overview

Summary

Evotec AG's financial performance is mixed. The company lacks debt and has a strong equity base, providing stability. However, declining revenue, profitability issues, and cash flow challenges significantly impact the financial outlook.

Income Statement

Evotec AG has experienced volatility in its financial performance. The company showed a decline in revenue from the previous year, with a current TTM revenue of $777.05 million compared to $781.43 million in 2023, indicating a small negative revenue growth rate. The gross profit margin has also decreased from 22.40% to 13.70%, suggesting pressure on cost management. Additionally, the company is currently operating at a net loss, with a net profit margin of -22.06% in TTM, compared to -10.74% in 2023. EBIT and EBITDA margins have also declined, reflecting operational challenges.

Balance Sheet

Evotec AG maintains a strong equity position with a stockholders' equity of $968.47 million against total assets of $1.99 billion, resulting in a solid equity ratio of 48.64% for TTM. The company's debt-to-equity ratio is favorable at 0, indicating no current debt burden, which provides financial stability. However, the return on equity is negative due to losses, highlighting profitability challenges.

Cash Flow

The company's cash flow situation presents a mixed picture. Free cash flow has worsened, with a significant negative figure of -$209.45 million in TTM compared to -$179.56 million in 2023, indicating challenges in generating cash flows from operations and capital expenditures. Operating cash flow to net income ratio is negative, reflecting cash flow difficulties despite the absence of debt.

Breakdown
Dec 2023	Dec 2022	Dec 2021	Dec 2020	Dec 2019
Income Statement		Total Revenue
781.43M	751.45M	618.03M	500.92M	446.44M
	Gross Profit
175.05M	174.06M	151.54M	125.74M	132.89M
	EBIT
-47.51M	12.49M	27.32M	48.52M	62.59M
	EBITDA
24.13M	-86.08M	298.41M	75.50M	86.77M
	Net Income Common Stockholders
-83.91M	-175.66M	215.51M	6.28M	38.16M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
604.11M	729.98M	858.50M	492.22M	321.66M
	Total Assets
2.25B	2.26B	2.24B	1.46B	1.18B
	Total Debt
626.20M	506.67M	512.92M	491.96M	463.10M
	Net Debt
115.29M	91.52M	-186.41M	69.80M	186.06M
	Total Liabilities
1.13B	1.07B	857.48M	740.05M	703.88M
	Stockholders Equity
1.12B	1.19B	1.38B	722.85M	477.03M
Cash Flow		Free Cash Flow
-179.56M	21.75M	3.29M	-54.35M	10.31M
	Operating Cash Flow
36.44M	203.11M	122.24M	44.72M	42.22M
	Investing Cash Flow
-13.29M	-415.82M	-243.85M	-155.09M	-86.63M
	Financing Cash Flow
71.96M	-52.41M	398.43M	246.41M	211.26M

Evotec AG Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 4.30
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For EVO, the sentiment is Positive. The current price of 4.3 is above the 20-day moving average (MA) of 3.93, above the 50-day MA of 3.66, and above the 200-day MA of 3.96, indicating a bullish trend. The MACD of 0.17 indicates Negative momentum. The RSI at 61.35 is Neutral, neither overbought nor oversold. The STOCH value of 42.57 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for EVO.

Evotec AG Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
AMPH	74 Outperform	$1.13B	7.79	19.90%	―	8.05%	-8.46%
COLL	74 Outperform	$888.44M	15.03	19.23%	―	17.17%	-51.97%
PCRX	63 Neutral	$1.16B	―	-12.27%	―	3.85%	-339.15%
EVO	56 Neutral	$1.37B	―	-20.41%	―	0.45%	-125.61%
ANIP	56 Neutral	$1.52B	―	-4.86%	―	26.20%	-219.22%
Sector *	52 Neutral	$5.17B	3.59	-42.19%	2.82%	15.05%	-0.04%
HROW	47 Neutral	$884.85M	―	-37.23%	―	53.32%	33.82%