Intrinsic Value Cancom SE (COK.DE)

• Previous Close: €28.45
• Intrinsic Value: €10.52
• Upside potential: -63%

Stock Valuation Context

Business Model And Market Position

CANCOM SE operates as a leading IT infrastructure and services provider in Germany and internationally, specializing in cloud and IT solutions. The company serves a diverse clientele, including SMEs, large corporations, and public institutions, through its two core segments: Cloud Solutions and IT Solutions. Its Cloud Solutions segment delivers cloud and shared managed services, while the IT Solutions segment focuses on IT infrastructure, system integration, and consulting. CANCOM differentiates itself with its proprietary AHP Enterprise Cloud software, which enhances multi-cloud management, alongside offerings in IoT, data analytics, and IT security. The company’s strong market position is reinforced by its end-to-end IT service capabilities, enabling it to address complex digital transformation needs. With a foundation dating back to 1992, CANCOM has established deep industry expertise and a reputation for reliability in the competitive European IT services market.

Revenue Profitability And Efficiency

CANCOM reported revenue of €1.75 billion for the period, with net income of €33.5 million, reflecting a net margin of approximately 1.9%. The company generated €192.9 million in operating cash flow, demonstrating solid cash conversion efficiency. Capital expenditures were modest at €22.3 million, indicating disciplined investment in growth initiatives.

Earnings Power And Capital Efficiency

The company’s diluted EPS stood at €0.99, supported by its diversified service offerings and scalable cloud solutions. Operating cash flow significantly exceeded net income, highlighting strong working capital management. CANCOM’s capital efficiency is further evidenced by its ability to maintain profitability while investing in high-growth areas like cloud computing and IT security.

Balance Sheet And Financial Health

CANCOM maintains a conservative balance sheet with €144.7 million in cash and equivalents against total debt of €194 million, resulting in a manageable net debt position. The company’s liquidity position appears stable, supported by healthy operating cash flows and a balanced approach to leverage.

Growth Trends And Dividend Policy

The company’s growth is driven by increasing demand for cloud and digital transformation services, though net income margins remain relatively thin. CANCOM pays a dividend of €1 per share, reflecting a commitment to shareholder returns while retaining sufficient capital for reinvestment.

Valuation And Market Expectations

With a market capitalization of approximately €849 million and a beta of 1.44, CANCOM is viewed as a moderately volatile play in the IT services sector. Investors appear to price in expectations of steady growth, given the company’s exposure to high-demand areas like cloud computing and cybersecurity.

Strategic Advantages And Outlook

CANCOM’s strategic advantages lie in its integrated IT service portfolio and strong client relationships. The outlook remains positive as businesses continue to prioritize digital transformation, though competitive pressures and margin sustainability will be key monitorables.

Sources

Company filings, market data