Intrinsic Value SergeFerrari Group S.A. (SEFER.PA)

• Previous Close: €8.48
• Intrinsic Value: €2.36
• Upside potential: -72%

Stock Valuation Context

Business Model And Market Position

SergeFerrari Group SA operates in the industrials sector, specializing in flexible composite materials for construction, architecture, and outdoor applications. The company’s core revenue model is driven by the design, manufacturing, and distribution of high-performance materials used in tensile structures, acoustic treatments, bioclimatic facades, and waterproof membranes. Its diversified product portfolio serves both B2B and B2C markets, including sectors like yachting, visual communication, and modular structures, positioning it as a niche innovator in sustainable building solutions. With a strong focus on R&D, SergeFerrari has developed proprietary antiviral technologies and eco-friendly materials, enhancing its competitive edge in Europe and select international markets. The company’s market position is bolstered by its vertically integrated operations, allowing for quality control and customization, though it faces competition from larger industrial material providers. Its emphasis on durability and technical performance aligns with growing demand for energy-efficient and adaptive architectural solutions.

Revenue Profitability And Efficiency

In FY 2024, SergeFerrari reported revenue of €323.6 million, reflecting its established market presence. However, net income stood at a loss of €15.2 million, with diluted EPS of -€1.33, indicating profitability challenges. Operating cash flow was positive at €32.6 million, suggesting operational resilience, while capital expenditures of €8.8 million highlight ongoing investments in production capacity and innovation.

Earnings Power And Capital Efficiency

The company’s negative net income and EPS underscore earnings pressure, likely due to input cost inflation or competitive pricing. Operating cash flow coverage of capex (3.7x) signals adequate liquidity for reinvestment, but margin improvement is critical. Capital efficiency metrics are unavailable, but the debt-heavy structure (€146.8 million) may weigh on returns.

Balance Sheet And Financial Health

SergeFerrari’s balance sheet shows €21.7 million in cash against €146.8 million in total debt, implying a leveraged position. The net debt-to-equity ratio is elevated, though operating cash flow provides some buffer. Liquidity appears manageable, but refinancing risks may arise if profitability does not recover.

Growth Trends And Dividend Policy

Despite recent losses, the company maintains a dividend of €0.12 per share, signaling confidence in long-term cash generation. Growth prospects hinge on demand for sustainable construction materials and expansion into high-margin niches like antiviral surfaces. Historical trends suggest cyclical exposure to construction activity in Europe.

Valuation And Market Expectations

With a market cap of €63.7 million and a beta of 1.12, SergeFerrari trades at a discount to peers, reflecting its earnings volatility. Investors likely await clearer signs of margin recovery or debt reduction before rerating the stock.

Strategic Advantages And Outlook

SergeFerrari’s strengths lie in its specialized material expertise and R&D pipeline, but macroeconomic headwinds and leverage pose risks. Success depends on executing cost controls, diversifying revenue streams, and capitalizing on green building trends. The outlook remains cautious pending improved profitability.

Sources

Company filings, Euronext Paris disclosures