Intrinsic Value NextStage SCA (NEXTS.PA)

• Previous Close: €105.00
• Intrinsic Value: n/a
• Upside potential: n/a%

Stock Valuation Context

Business Model And Market Position

NextStage SCA is a France-based private equity firm specializing in long-term investments in medium-sized and mid-cap companies across Europe, excluding the biotech sector. The firm targets mature and growth-stage businesses with revenues between €10 million and €500 million, deploying capital ranging from €8 million to €40 million per investment. Its portfolio strategy emphasizes unlisted mid-cap companies (75%) while maintaining exposure to listed mid-caps on Euronext or Alternext (25%). NextStage operates as a subsidiary of NextStage AM, leveraging its parent’s expertise in asset management to identify undervalued opportunities with strong operational upside. The firm’s sector-agnostic approach allows it to capitalize on diverse industries, though it avoids high-risk biotech ventures. Its focus on European markets positions it as a regional player with deep local insights, differentiating it from global private equity giants. By targeting companies with enterprise values of €25 million to €200 million, NextStage fills a niche between venture capital and large-cap buyouts, offering tailored capital solutions to underserved mid-market businesses.

Revenue Profitability And Efficiency

In FY 2021, NextStage reported revenue of €27.2 million and net income of €25.4 million, reflecting a high net margin of approximately 93.5%. The firm’s diluted EPS stood at €0.24, though its operating cash flow was negative at €-2.6 million, likely due to timing differences in investment realizations or working capital adjustments. Capital expenditures were negligible, indicating a lean operational model focused on financial investments rather than physical assets.

Earnings Power And Capital Efficiency

NextStage’s earnings power is underscored by its ability to generate substantial net income relative to revenue, suggesting effective cost management and profitable exits or distributions from its portfolio. The absence of capital expenditures aligns with its asset-light structure, though the negative operating cash flow warrants scrutiny into liquidity management and investment cycles.

Balance Sheet And Financial Health

The firm maintained a robust liquidity position with €39.98 million in cash and equivalents, against total debt of €17.11 million, indicating a conservative leverage profile. This strong balance sheet supports its ability to fund new investments without excessive reliance on external financing, though the debt level suggests some leverage to enhance returns.

Growth Trends And Dividend Policy

NextStage’s growth is tied to its portfolio performance and exit strategies, with no dividends paid in FY 2021, reflecting a reinvestment-focused approach. The firm’s mid-market specialization and European focus provide a scalable platform, though its growth trajectory depends on macroeconomic conditions and private equity deal flow in the region.

Valuation And Market Expectations

With a beta of 0.21, NextStage exhibits low correlation to broader market movements, typical of private equity firms with illiquid holdings. The lack of reported market cap suggests limited public float or inactive trading, making valuation reliant on NAV estimates rather than market multiples.

Strategic Advantages And Outlook

NextStage’s niche focus on European mid-caps and its disciplined investment criteria provide a competitive edge in identifying undervalued assets. However, its outlook hinges on regional economic stability and the ability to execute timely exits. The firm’s subsidiary structure under NextStage AM may offer operational synergies, but its avoidance of biotech could limit exposure to high-growth sectors.

Sources

Company description, financial data provided