Intrinsic Value OHB SE (0FH7.L)

• Previous Close: £300.00
• Intrinsic Value: £30.40
• Upside potential: -90%

Stock Valuation Context

Business Model And Market Position

OHB SE is a Germany-based space and technology company specializing in satellite systems, aerospace engineering, and digital solutions. The company operates through three core segments: Space Systems, Aerospace, and Digital. Its Space Systems segment focuses on small satellites for navigation, research, and Earth observation, while the Aerospace segment develops aviation and space-related products. The Digital segment delivers mechatronic systems, radio telescope projects, and cybersecurity solutions. OHB SE serves government and commercial clients, positioning itself as a key player in Europe's space industry, competing with larger aerospace firms through niche expertise in small satellites and specialized space technology. The company benefits from long-term contracts with ESA and other institutional clients, ensuring stable revenue streams despite the capital-intensive nature of the industry. Its diversified portfolio across space, aviation, and digital applications mitigates sector-specific risks while capitalizing on growing demand for satellite-based data and space exploration.

Revenue Profitability And Efficiency

OHB SE reported EUR 1.00 billion in revenue for the period, with a net loss of EUR 196 thousand, reflecting thin margins in its capital-intensive operations. The company generated EUR 146.9 million in operating cash flow, demonstrating its ability to convert projects into cash despite reporting negative net income. Capital expenditures were modest at EUR 15.3 million, suggesting disciplined investment in growth initiatives.

Earnings Power And Capital Efficiency

The company's diluted EPS of EUR -0.0102 indicates weak near-term earnings power, though its operating cash flow suggests underlying project execution remains stable. OHB SE's capital efficiency is constrained by the long development cycles and high R&D costs inherent in the space technology sector, though its specialized satellite expertise provides some pricing power in niche markets.

Balance Sheet And Financial Health

OHB SE maintains a solid liquidity position with EUR 118.0 million in cash against EUR 195.4 million in total debt, indicating manageable leverage. The balance sheet reflects the working capital needs of large space projects, with current assets likely tied up in multi-year contracts. The company's financial health appears stable given its government-backed contract portfolio.

Growth Trends And Dividend Policy

Despite reporting a net loss, OHB SE maintains a dividend of EUR 0.6 per share, signaling confidence in its contract pipeline. Growth prospects are tied to European space program funding and commercial satellite demand, with the small satellite segment offering scalability potential. The company's backlog visibility provides some earnings predictability despite cyclical aerospace spending patterns.

Valuation And Market Expectations

With a market capitalization of EUR 1.23 billion, OHB SE trades at approximately 1.2x revenue, reflecting investor expectations for margin improvement as projects mature. The low beta of 0.608 suggests the stock is less volatile than the broader market, likely due to its institutional customer base and long-term contracts.

Strategic Advantages And Outlook

OHB SE's strategic advantages include its specialization in small satellites and long-standing relationships with European space agencies. The outlook remains cautiously positive as growth in Earth observation and navigation satellites offsets defense budget uncertainties. Cybersecurity and digital applications present new growth vectors, though execution on margin improvement will be critical for sustained profitability.

Sources

Company filings, London Stock Exchange data