Stock Analysis & Valuation OHB SE (0FH7.L)

• Previous Close: £300.00
• Sector Valuation Confidence Level: Moderate

Valuation method	Value, £	Upside, %
Artificial intelligence (AI)	214.10	-29
Intrinsic value (DCF)	30.40	-90
Graham-Dodd Method	9.70	-97
Graham Formula		n/a

Strategic Investment Analysis

Company Overview

OHB SE is a leading German space and technology company specializing in satellite systems, aerospace engineering, and digital solutions. Headquartered in Bremen, Germany, OHB operates through three core segments: Space Systems, Aerospace, and Digital. The Space Systems segment focuses on developing and manufacturing small satellites for navigation, research, communications, and Earth observation, including contributions to the International Space Station and deep-space exploration. The Aerospace segment engages in aviation and space product assembly, while the Digital segment delivers mechatronic systems, radio telescope projects, and cybersecurity solutions. OHB serves European and international markets, positioning itself as a key player in the growing space technology sector. With a market capitalization of €1.23 billion, OHB is a significant contributor to Europe's space industry, collaborating with agencies like ESA and EUMETSAT. The company's expertise in satellite technology and aerospace innovation makes it a critical player in global space infrastructure and defense applications.

Investment Summary

OHB SE presents a mixed investment profile. The company operates in the high-growth space technology sector, benefiting from increasing demand for satellite communications, Earth observation, and defense-related space projects. However, its recent financials show a net loss of €196,000 (FY 2024) and negative diluted EPS (-€0.0102), raising concerns about profitability. Positives include a strong operating cash flow of €146.9 million and a manageable debt level (€195.4 million against €118 million in cash). The dividend yield of €0.6 per share may appeal to income-focused investors, but sustainability depends on improved earnings. OHB's low beta (0.608) suggests lower volatility than the broader market, but investors should weigh its growth potential against execution risks in the capital-intensive space industry.

Competitive Analysis

OHB SE competes in the European space technology market, differentiating itself through specialization in small satellites and niche aerospace applications. Unlike larger rivals such as Airbus, OHB focuses on agile, cost-effective satellite solutions, particularly for scientific and governmental missions. Its competitive advantage lies in long-standing contracts with ESA and other European space agencies, providing revenue stability. However, the company faces challenges scaling against global aerospace giants with deeper R&D budgets. OHB's Digital segment offers differentiation through cybersecurity and mechatronics, but this remains a smaller revenue contributor. The company's German engineering reputation supports quality perception, but supply chain dependencies and reliance on public funding pose risks. OHB's mid-market positioning allows flexibility in bidding for contracts too small for mega-contractors but may limit its ability to compete for flagship space programs requiring massive capital outlays. Its competitive edge hinges on continued innovation in small satellite technology and leveraging EU space policy initiatives.

Major Competitors

• Airbus SE (AIR.PA): Airbus dominates the European aerospace sector with vastly greater scale (€59B revenue in 2023) and full-spectrum capabilities from commercial aircraft to space systems. Its space division competes directly with OHB in satellite manufacturing but focuses more on large-scale projects like Galileo. Strengths include unmatched R&D resources and global supply chains. Weaknesses include bureaucracy that OHB avoids through leaner operations. Airbus often outbids OHB for major contracts but lacks focus on small satellite specialization.
• Boeing Company (BA): Boeing is a global aerospace leader with substantial space systems operations, though primarily focused on the U.S. market. Its satellite and defense space capabilities overlap with OHB's offerings. Strengths include technological depth and U.S. government contracts. Weaknesses include recent quality control scandals and less focus on the European institutional market where OHB thrives. Boeing's space division is larger but less agile in small satellite solutions.
• SES S.A. (SESG.PA): SES is a satellite operator rather than manufacturer, but competes in downstream services where OHB's Digital segment operates. Strengths include one of the world's largest commercial satellite fleets. Weaknesses include declining legacy GEO satellite business. SES is more a customer than competitor for OHB's manufacturing division, but their move into hybrid networks pressures OHB's traditional government client base.
• Thales Group (0HAL.L): Thales competes in defense and space electronics, overlapping with OHB's aerospace and digital segments. Strengths include strong defense sector positioning and cybersecurity expertise. Weaknesses include less focus on complete satellite systems. Thales often partners with OHB on European space projects but competes for subsystem contracts. Its larger scale gives procurement advantages OHB lacks.
• Matterport, Inc. (MTTR): Matterport operates in digital twin technology, tangentially competing with OHB's Digital segment in spatial data applications. Strengths include leading 3D capture technology for terrestrial applications. Weaknesses include no space sector experience. While not a direct competitor, Matterport represents disruptive tech that could challenge OHB's traditional Earth observation data services long-term.