Qbeyond: Cutting into a weak year; chg. est., PT down - NuWays AG Research
Yesterday, QBY reported a weak Q2 and cut its FY26 guidance significantly, with both events telling different stories.
ANNONS
Q2 sales were down 3% yoy to € 43.0m (eNuW: € 43.4m), as the weak MS segment offset the positive developments visible within Consulting. A split we expected, but not as pronounced as this.
MS sales were down 7.7% to € 27.0m (eNuW: € 27.8m) impacted by the ongoing investment restraint in the German Mittelstand, which by now hurts on two fronts: new business is slow, but the heavier drag sits in the installed base. Here, renewals keep coming in at worse terms, which management does not see turning before FY27. Importantly, the volume is holding, visible in stable purchased services yoy despite the lower top-line. The account base is therefore intact, but the margin is set to be harder to win back as in the case of a volume shortfall. Consulting on the other hand stood out, growing 5.8% yoy to € 16.0m (eNuW: € 15.6m), carried by demand for S/4HANA migration support and AI implementation work, plus commissions out of the SAP business.
Reiterate BUY with a new PT of € 5.10 (old: € 5.90) based on DCF. The cut is largely driven by MS, where the price concessions now sit in the base for the full contract term rather than reversing with the cycle, leaving the cost side as the only lever into FY27e.
