Bechtle AG – Value Analysis (XETRA:BC8) : December 26, 2017

Capitalcube gives Bechtle AG a score of 66.

Our analysis is based on comparing Bechtle AG with the following peers – CENIT AG, CANCOM SE, Pro DV Software AG, QSC AG and TTL Information Technology AG (CSH-DE, COK-DE, PDA-DE, QSC-DE and TTO-DE).

Investment Outlook

Bechtle AG has a fundamental score of 66 and has a relative valuation of NEUTRAL.

Fundamental Score

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Company Overview

  • With respect to peers, relative outperformance over the last year is in contrast to the more recent underperformance.
  • It’s current Price/Book of 3.95 is about median in its peer group.
  • The market expects BC8-DE to grow at about the same rate as the peers and to maintain the median returns it currently generates.
  • BC8-DE‘s median net profit margins and relatively high asset efficiency give it some operating leverage.
  • The company’s year-on-year change in revenues and earnings are better than the median among its peer group.
  • BC8-DE‘s return on assets currently and over the past five years is around the peer median and suggest that it does not have any particular operational advantages versus peers.
  • The company’s margins are around the peer medians and do not suggest any benefit from a pricing or an operating cost advantage versus peers.
  • While BC8-DE‘s revenues in recent years have grown faster than the peer median, the market gives the stock a P/E ratio that is around peer median suggesting that the market has some questions about the company’s long-term strategy.
  • The company’s capital investment program suggests it is under-investing in a business that is producing peer median returns.
  • BC8-DE has the financial and operating capacity to borrow quickly.

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Leverage & Liquidity

BC8-DE has the financial and operating capacity to borrow quickly.

  • With debt at a relatively low 2.75% of its enterprise value compared to an overall benchmark of 25% (Note: The peer median is currently 1.50%), and a well-cushioned interest coverage level of 59.07x, BC8-DE can probably borrow quickly. We classify the company as Quick & Able in terms of its capacity to raise additional debt.
  • Of the 5 chosen peers for the company, only 3 of the stocks have an outstanding debt balance. Companies with no debt include PDA-DE and TTO-DE.

BC8-DE has maintained its Quick & Able profile from the recent year-end.

  • BC8-DE‘s interest coverage is its highest relative to the last five years and compares to a low of 21.05x in 2012.
  • The increase in its interest coverage to 59.07x from 53.32x (in 2016) was also accompanied by an increase in its peer median during this period to 41.43x from 38.56x.
  • Interest coverage rose 2.88 points relative to peers.
  • BC8-DE‘s debt-EV is its lowest relative to the last five years and compares to a high of 12.22% in 2012.
  • Compared to 2016, debt-EV has remained relatively stable for both the company (2.75%) and the peer median (1.50%).

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Key Liquidity Items

Company Debt/Enterprise Value (%) Current Ratio Interest Coverage (x) Cash Flow To Total Debt (%)
CENIT AG 0.86 1.49 750.4 1421.19
CANCOM SE 2.14 1.64 17.35 167.35
Pro DV Software AG 0 3.09 23.8 999
QSC AG 44.33 2.04 0.91 20.19
TTL Information Technology AG 0 22.63 No interest exp -394.36
Bechtle AG 2.75 2.16 59.07 197.55
Peer Median 1.5 2.1 41.43 182.45
Best In Class 0.86 22.63 No interest exp 1421.19

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Company Profile

Bechtle AG engages in the provision of information technology services. It operates through the Information Technology System House and Managed Services, and Information Technology Electronic Commerce segments. The Information Technology System House and Managed Services segment offers strategy consulting services, hardware and software, project planning and roll-out, system integration, IT services and training, cloud services, as well as IT operation. The Information Technology Electronic Commerce segment includes Internet phone-based hardware and software trading activities. The company was founded by Klaus von Jan, Ralf Klenk, and Gerhard Schick on July 21, 1983 and is headquartered in Neckarsulm, Germany.


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