| Valuation method | Value, $ | Upside, % |
|---|---|---|
| Artificial intelligence (AI) | 31.90 | 774 |
| Intrinsic value (DCF) | 1.59 | -56 |
| Graham-Dodd Method | n/a | |
| Graham Formula | n/a |
Evotec SE (NASDAQ: EVO) is a leading drug discovery and development partner for the global pharmaceutical and biotechnology industry. Headquartered in Hamburg, Germany, Evotec specializes in collaborative research across multiple therapeutic areas, including diabetes, fibrosis, infectious diseases, CNS disorders, oncology, and rare diseases. The company operates through strategic partnerships with major pharmaceutical firms such as Bayer, Novo Nordisk, Pfizer, and Takeda, leveraging its proprietary platforms to accelerate drug development. With a focus on innovation and efficiency, Evotec combines high-throughput screening, AI-driven drug discovery, and integrated R&D services to deliver value to its partners. As a key player in the contract research organization (CRO) and drug discovery outsourcing sector, Evotec is positioned at the forefront of precision medicine and biopharmaceutical innovation. Its asset-centric business model, combining fee-for-service and milestone-based revenue streams, makes it a critical enabler of the pharmaceutical value chain.
Evotec SE presents a high-risk, high-reward investment opportunity in the drug discovery and development space. The company's collaborative model with top-tier pharmaceutical partners provides revenue stability, but its negative net income (-$196M in latest reporting) and high R&D costs raise concerns about near-term profitability. Its $1.68B market cap reflects investor confidence in its long-term growth potential, particularly in AI-driven drug discovery and niche therapeutic areas. However, reliance on partner-funded projects exposes it to pipeline volatility. The lack of dividends and negative EPS (-$0.28 diluted) may deter income-focused investors, while its beta of 1.11 suggests moderate market sensitivity. Evotec's strong cash position ($306M) provides a buffer, but significant capital expenditures ($117M) indicate ongoing investment in capacity expansion.
Evotec differentiates itself through its integrated 'lab-to-market' drug discovery platform, combining proprietary technologies like PanOmics and Just - Evotec Biologics with a partnership-driven business model. Unlike traditional CROs, Evotec engages in risk-sharing collaborations, often retaining rights to co-develop assets—a strategy that enhances upside potential but increases operational complexity. Its therapeutic area expertise, particularly in neuroscience and diabetes, provides a competitive edge in securing high-value partnerships. However, the company faces intense competition from larger CROs with broader geographic reach and deeper financial resources. Evotec's asset-light approach mitigates some risk but limits control over late-stage development. Its European base offers cost advantages in early-stage research but may limit visibility in the dominant North American biopharma market. The company's shift toward AI and data-driven discovery (e.g., through its EVOpanOmics platform) positions it well for industry trends but requires sustained tech investment. While its partnership roster (including Novo Nordisk and Bayer) validates its capabilities, reliance on a few major collaborators (~50% of revenue from top 5 partners) creates customer concentration risk.