On Monday, Deutsche Bank (ETR:DBKGn) updated its financial outlook on Scout24 AG (G24:GR) (OTC: SCOTF), increasing the price target to EUR 92.00 from the previous EUR 84.00 while maintaining a Buy rating on the stock. This revision follows the company's third-quarter financial performance, which showcased significant operational leverage and profitability.
Scout24 AG reported its third-quarter results, which revealed an 8.5% year-over-year increase in revenue, while adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) saw a more substantial rise of 16.1%. This growth in adjusted EBITDA outpaced revenue growth and led to an impressive margin of approximately 63%, which is roughly 4 percentage points higher than the same quarter in the previous year.
The improved financial metrics were attributed in part to a reduction in marketing expenses, which decreased by about 17.5% for the quarter. The company's management credited this decrease to enhanced inter-connectivity within the platform, which reduced the need for marketing spend to sell products. This effect is seen as a positive aspect of the marketplace model, indicating a strong network effect that benefits the company's operational efficiency.
The analyst's comments highlight the company's strong quarter, with a performance that exceeded market expectations in terms of adjusted EBITDA. The ability of Scout24 to continue finding growth opportunities and channeling them into increased profitability was particularly emphasized, suggesting a robust underlying business model that could lead to further financial success.
Looking ahead, Deutsche Bank anticipates another solid quarter for Scout24, with continued business momentum. The financial institution's stance reflects confidence in Scout24's strategic position and its potential for delivering shareholder value through sustained growth and profitability.
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