On Wednesday, H.C. Wainwright adjusted its stance on shares of Evotec (NASDAQ:EVO), reducing the price target to $11.00 from the previous $14.00 while maintaining a Buy rating on the stock. This change follows Evotec's announcement of its financial results for the year ending 2023 and its outlook for 2024.
Evotec disclosed its year-end 2023 financial performance, reporting group revenues of €781.4 million, marking a 4% year-over-year increase. This revenue includes a significant contribution of €108.4 million from Just-Evotec Biologic, which itself saw a substantial 111% growth in revenue. However, the rest of the revenue streams faced a 4% year-over-year decline.
The management addressed that 2023 was fraught with challenges for Evotec, including a €70 million loss due to a cyber attack in April and difficult conditions in the biotech customer segment.
Despite these hurdles, the company's management has guided for 2024, anticipating "mid-double-digit percentage growth" from €66.4 million in 2023. This projection is notably lower than previous forecasts. Additionally, management has retracted the mid-term targets set for 2025, which included €300 million in adjusted EBITDA, stating that these goals will be reassessed later in the year following the appointment of the new CEO, Dr. Christian Wojczewski, in July.
H.C. Wainwright's analyst expressed continued confidence in Evotec's platform and its potential to capitalize on the changing R&D landscape. Nevertheless, the revised price target to $11 from $14 reflects the near-term uncertainties facing the business.
InvestingPro Insights
In light of H.C. Wainwright's recent price target adjustment for Evotec (NASDAQ:EVO), it's important to consider additional market data and insights. According to InvestingPro data, Evotec currently holds a market capitalization of $2.51 billion, and the stock has experienced significant volatility, with a one-week price total return of -26.85%. This aligns with the InvestingPro Tip that the stock has taken a substantial hit over the last week. Moreover, the company's P/E ratio stands at a negative -29.90, reflecting analysts' expectations that Evotec will not be profitable this year, as indicated by another InvestingPro Tip. The revenue growth for the last twelve months as of Q4 2023 was 3.99%, which is consistent with the company's reported year-over-year increase in revenues.
InvestingPro Tips also highlight that Evotec operates with a moderate level of debt and trades at a high EBIT valuation multiple. This financial context provides investors with a nuanced understanding of the company's current valuation challenges. Additionally, Evotec does not pay a dividend, which could influence the investment decisions of income-focused shareholders. For those seeking further insights, there are additional InvestingPro Tips available at: https://www.investing.com/pro/EVO. Interested readers can use coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription, unlocking even more valuable investment advice.
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