(Boursier.com) — Wallix fall of 11.7% to 8.9 euros after widening its losses last year despite record turnover. The group nevertheless explains that it has reached critical size and benefits from a solid base of nearly 3,000 active contracts with significant recurrence of its revenues. This new dimension allows it to enter a new phase of its development combining ‘ramp-up’ and return on investment, with the objective of generating strong, recurring and profitable growth under the effect of a 5-step performance plan points.
The 2023 accounts, more heavily in deficit than expected, mainly bear the trace of the accelerated switch to subscription mode and the weight of expenses relating to the overhaul of the commercial organization, underlines TP ICAP Midcap. In terms of outlook, management reaffirms its confidence in the Group’s ability to maintain high growth rates in its recurring revenues and in achieving positive operating income from the second half of 2024. Investors do not appreciate bad surprises, the stock risks being seriously shaken following this very disappointing publication, nevertheless affirmed the broker before the opening. However, he maintains his confidence for the medium term, believing in the Group’s ability to now better control its costs, and therefore recommends strengthening positions on any excessive weakness in the stock in the short term. When ‘buying’ the stock, the analyst adjusts his target from 18 to 17 euros.
Although lower than its expectations, this publication remains generally in line with the trajectory and roadmap announced by the company (i.e. investment phase from 2021 to 2023, before really reaping the benefits from 2024) , details Oddo BHF. Wallix is now approaching the second half of its plan with confidence, and should enter a phase of “profitability” of its investments, capable of gradually reassuring the market. The upcoming development phase therefore offers more visibility (even if the trajectory remains to be confirmed) and reveals an attractive risk/reward at the current price. Indeed, in the event of good execution, this next “cycle” could quickly be associated with a significant rerating of the stock, while the valuation, close to low points, remains attractive. Taking into account these elements, and a speculative component which cannot be ruled out, the broker reiterates its ‘outperformance’ opinion and its target of 16 euros.
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