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On Thursday, Deutsche Bank (ETR:DBKGn) adjusted its price target for WAG Payment Solutions PLC (LON:WPS:LN), reducing it to GBP0.90 from the previous GBP1.05. Despite the cut in the price target, the firm continues to recommend a Buy rating on the company’s stock.
WAG Payment Solutions, also known as Euroway, reported its full-year 2024 financial results, showing a robust performance in a challenging market environment for the Cash Register Tapes (CRT) sector. The company’s net revenues increased by 14%, while its adjusted EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) rose by 12%. The firm also introduced a new metric, adjusted EBITDA of €88.7 million, which reflects a 23% increase and translates to a margin of 30.3%. This figure excludes capitalized development costs.
The company notably excelled in cash generation, with its net debt decreasing to €275 million, which is 2.3 times the net debt to EBITDA ratio, showing an improvement from the previous 2.9 times ratio. This was achieved despite the company’s continued investment in capital expenditures and research and development, which amounted to €46 million, and a payment of €37 million for deferred consideration, equivalent to £25 million.
In light of these results, Deutsche Bank expressed a cautious stance but acknowledged the company’s strong performance. As a reflection of this positive outcome, WAG Payment Solutions proposed a special dividend payment of 3p per share, totaling approximately £25 million, to its shareholders.
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