Analysts at SMC Research have expressed in their follow-up study to the GK Software AG disappointed about the result development of specialist retail software and therefore their earnings estimates as well its price target on the shares of GK Software significantly reduced. The rating, the research company nevertheless leaves to “buy”
With innovative products, a strong market position and the close cooperation with SAP:. Dispose, GK Software AG has the necessary ingredients to the success of earlier continue years. But earnings side, the company had three years came from the track . Due to the reluctance to invest in German retailing go through new business in the previous core market, a period of weakness, while the logical alternative, the expansion abroad, have been found to be significantly longer and more especially as significantly more expensive than initially expected.
Last’ve GK Software could announce some promising statements in North America and in South Africa , but the result they both last year and in the first quarter remained still below expectations of SMC Research.
The hope of SMC analysts that the profit situation would improve with the completion of a sufficient number of license sales “automatically”, have not been fulfilled. Rather, it seems at present that suffered by the expansion of the organization, the efficiency of processes and project management have. To return to the old profitability, it is sufficient in the opinion of the SMC Research therefore contrary to previous assumptions no longer “only” the number of transactions to increase. Rather took the enlarged structures, so SMC Research, apparently still a start-up time before they would run smoothly again. This keeps the SMC Research for the contribution of the acquired in March retail division of DBS possible.
The research house had so his earnings estimates reduced significantly and expect instead for the current year a high profit now get a small loss. On this basis, the DCF model deliver a fair value per share of 32.32 euros, making GK Software would currently fairly valued by the market. However, SMC Research ranks just after the further intensification of the SAP partnership the scenario of a takeover by the Walldorf-based group perspective as quite probable one, which is why the analysts, as in prior years, their price target with a 25-percent takeover premium calculate. The target price is so loud 40.40 euros, the rating leaves SMC Research on this basis remains unchanged at “Buy”
. (Source: Global Equities Research Guide)
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