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Investing.com -- Berenberg initiated coverage of Innoscripta SE (ETR:1INN) in a note dated Tuesday, with a “buy” rating and a €200 price target, citing the company’s early leadership in the German R&D tax credit software market and its strong financial outlook.
Innoscripta offers a software platform that enables businesses to claim R&D tax credits and manage research documentation.
The German market for such credits is still developing, despite Germany having one of the highest business R&D spends in Europe.
As of 2024, only 28% of eligible firms had used the scheme, with just 33,840 applications filed since inception, according to BSFZ data.
Germany’s R&D credit framework, introduced in 2020, has grown significantly, from €20 million in credits issued in 2021 to an estimated €1.1 billion by 2024.
A draft bill passed on June 4, 2025, proposes raising the annual cap on eligible R&D expenses from €10 million to €12 million and expanding coverage to include overheads. If enacted, this could increase average claim volumes per client.
Innoscripta’s shares listed on the Frankfurt Stock Exchange on May 23, 2025, at €120. Since the IPO, shares have declined 18% despite favorable regulatory developments.
The current market price is €100.60, with a market cap of €1.01 billion and an enterprise value of €990 million.
Financially, the company posted €64.7 million in revenue in 2024 and is forecast to reach €102 million in 2025, representing a 58% year-over-year increase.
EBIT is projected to rise from €37.3 million to €54.9 million over the same period, with margins easing slightly from 57.6% to 53.8%.
Net profit is expected to grow from €25.1 million in 2024 to €36.8 million in 2025. Free cash flow is forecast to increase from €19.9 million to €23 million.
By 2029, Berenberg forecasts €271 million in revenue, with customer numbers reaching 4,729, covering an estimated 41% of Germany’s private R&D workforce.
Sales and EBIT CAGRs of 33% and 28%, respectively, are forecast for 2024–2029. Churn is low, at 2.3% in 2024, and average revenue per filed customer was €106k. Customer acquisition cost is about €20k, regardless of company size.
The stock trades at 18.0x 2025 EV/EBIT and 12.9x for 2026, compared with a median peer multiple of 38.2x and 31.5x.
Even at €200, Berenberg estimates Innoscripta would still trade at a 17% discount to peers.
Risks to the outlook include potential regulatory changes, execution challenges, increased competition, and cybersecurity concerns.
However, Berenberg sees Innoscripta’s scalable model, strong margins, and first-mover advantage as drivers of long-term value.