EVOLUTION AB

EVO
Delayed Quote. Delayed  - 09/24 11:29:31 am
1481.6SEK -2.60%

Evolution AB : Technically solid

07/29/2021 | 02:58am
Jordan Dufee
Senior Analyst

Strategy published on : 07/29/2021 | 02:58

long trade
Live

Entry price : 1592SEK
Target : 2000SEK
Stop-loss : 1300SEK
Potential : 25.63%

Shares in Evolution AB show a positive technical chart pattern over the medium term. The timing to jump back on the rising trend seems good.
Investors have an opportunity to buy the stock and target the SEK 2000.

Summary

● The company has strong fundamentals. More than 70% of companies have a lower mix of growth, profitability, debt and visibility.


Strengths

● The prospective high growth for the next fiscal years is among the main assets of the company

● The company's profit outlook over the next few years is a strong asset.

● The company's EBITDA/Sales ratio is relatively high and results in high margins before depreciation, amortization and taxes.

● The group's activity appears highly profitable thanks to its outperforming net margins.

● Thanks to a sound financial situation, the firm has significant leeway for investment.

● Over the past year, analysts have regularly revised upwards their sales forecast for the company.

● Over the last 4 months, analysts have significantly revised upwards the company's estimated sales.

● For the last twelve months, analysts have been gradually revising upwards their EPS forecast for the upcoming fiscal year.

● Analysts remain confident with respect to the group's activity and, more often than not, have revised upwards their earnings per share estimates.

● Over the past four months, analysts' average price target has been revised upwards significantly.

● The opinion of analysts covering the stock has improved over the past four months.

● Over the past twelve months, analysts' opinions have been strongly revised upwards.

● Historically, the company has been releasing figures that are above expectations.


Weaknesses

● The company's valuation in terms of earnings multiples is rather high. Indeed, the firm is getting paid 563.38 times its estimated earnings per share for the ongoing year.

● Based on current prices, the company has particularly high valuation levels.

● In relation to the value of its tangible assets, the company's valuation appears relatively high.

● The valuation of the company is particularly high given the cash flows generated by its activity.

● The firm pays small or no dividend to shareholders. For that reason, it is not a yield company.

● The price targets of analysts who cover the stock differ significantly. This implies difficulties in evaluating the company and its business.

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