Comet Holding shares plunge over 12% despite revenue growth

Investing.com -- Shares of Comet Holding AG (SIX:COTNE) fell more than 12% on Thursday after the Swiss technology company reported its full-year 2024 financial results. 

While Comet posted a 12.1% increase in net sales to CHF 445.4 million and a stronger EBITDA margin of 13.6%, concerns over weak performance in key divisions and cautious guidance for 2025 appeared to weigh on investor sentiment.

Comet delivered solid overall growth in 2024, with net income more than doubling to CHF 35.1 million (CHF 4.52 per share) from CHF 15.4 million (CHF 1.98 per share) a year earlier. 

Free cash flow also rebounded sharply, reaching CHF 41.4 million from a deficit of CHF 0.6 million in 2023. The company’s balance sheet remained strong, with an equity ratio of 61.3% and a debt factor of –0.3.

Despite these improvements, investors reacted negatively to weaker performance in Comet’s industrial X-ray divisions. 

The IXS division (Industrial X-Ray Systems) saw net sales decline 0.9% to CHF 115.9 million, while EBITDA swung to a loss of CHF 4.3 million from a profit of CHF 4.9 million in 2023. 

The IXM division (Industrial X-Ray Modules) also faced headwinds, with sales falling 5.7% to CHF 94.6 million and EBITDA dropping 38.8% to CHF 14.6 million. 

The EBITDA margin for IXM shrank to 15.4% from 23.8% the previous year, reflecting a tougher industrial market environment.

In contrast, the PCT division (Plasma Control Technologies), which serves the semiconductor industry, delivered a strong performance. 

Sales surged 28.1% to CHF 247.4 million, while EBITDA jumped 181.7% to CHF 52.7 million, lifting the segment’s margin to 21.3% from 9.7% a year earlier. 

The growth was driven by increasing demand for semiconductor manufacturing equipment, particularly for AI and high-performance computing applications.

For 2025, Comet expects net sales between CHF 480 million and CHF 520 million and an EBITDA margin between 17.0% and 20.0%. 

However, the company warned that industrial sectors are likely to face persistent challenges, with only selective growth opportunities.

Semiconductor demand is expected to improve, but geopolitical risks and the slow recovery of certain consumer electronics segments could create uncertainty.

Additionally, Comet announced that chairman Paul Boudre will step down at the 2025 Annual General Meeting, with Benjamin Loh nominated as his successor. Leadership changes can introduce uncertainty, and investors may be weighing the impact of a transition at the top.

Comet proposed a 50% increase in its dividend to CHF 1.50 per share from CHF 1, representing a payout of 33.2% of net income.