da Intermonte – STAR7 company research report

Buon pomeriggio,

di seguito e in allegato inviamo il company research report relativo a STAR7 a cura di Intermonte.

Rimaniamo a disposizione per ulteriori informazioni.

Un caro saluto,

Chiara Cattaneo

M: +39 3409597461

Navigating a Full-Service Model for Product Information Lifecycle

• A full-range service provider with a global and integrated vision of the product information life cycle. STAR7 is a leading global provider of product information services with a presence in over 15 countries. They offer a one-stop-shop for managing a product’s information lifecycle, ideal for complex industries like technology, automotive and aerospace. This expertise with a loyal customer base allows visibility on revenue and identifying cross-selling opportunities, solidifying competitive position.
• Integrale7 one-stop-shop for product information. STAR7’s Integrale7 model offers a single point of contact for all product information needs combining expertise from five service lines to streamline information creation and offer clients comprehensive solutions across the entire product lifecycle. This unique approach positions the company as a leader in integrated product information management.
• Resilient FY23 Results. Revenue grew 25% YoY to €104mn, driven by both organic growth and the contribution of CAAR business unit. In terms of profitability, Reported EBITDA dipped 5.4% to €14.6mn mainly due to extraordinary charges related to the ongoing integration of CAAR. These costs, invested to unlock industrial efficiencies in the acquired business unit, negatively impacted margins, with the Adjusted EBITDA margin down from 18.6% to 15.3%. We expect profitability to recover as soon as full integration of CAAR is completed.
• Business expansion supporting revenue growth and improving profitability. We expect net revenues of €138mn in 2026, with Full-Service contracts accounting for ~70% of the total and Single-Service contracts the remaining ~30%, in line with management’s indications. We expect business growth through further internationalization and the contribution of the CAAR acquisition with related exploitation of synergies to improve margins, enabling to achieve 2026 EBITDA of €22.3mn with a margin of 16.2%, up from 14.0% in FY23. In terms of cash flow, we expect the company to report increasingly positive figures in 2024/25/26 and achieve a net debt of €34mn in YE26.
• Initiating coverage with BUY, TP Eu10.1. We consider the current share price an attractive opportunity because we expect the group to show the benefits of its sound business model and to get the synergies from the integration with CAAR. In light of resilient FY23 results, extraordinary costs now overcome, and growth prospects in terms of margins once again encouraging, we believe the stock’s growth trend can resume. STAR7 is trading at a discount to peers, with an EV/EBITDA ratio of 5.2x/4.7x/4.1x for 2024E/25E/26E, a ~30% discount vs the average of our selected peer cluster. We initiate coverage with a BUY rating and a TP of Eu10.1, resulting from the simple average of a DCF and a peer valuation. We believe a multiple rerating should be on the cards, with a recovery in margins already in 2024 and steadily increasing over the next few years together with clearly visible cash generation.