Equasens stock rises on better-than-expected Q4 revenue

Investing.com -- Shares of Equasens (EPA:EQUA) climbed 2% following the announcement of their fourth-quarter revenue, which slightly exceeded market expectations.

The French-based company reported Q4 revenue of €58.6 million, marking a 2.6% increase year-on-year (YoY) on a reported basis, and a marginal decline of 0.4% on a like-for-like (l-f-l) basis. This performance was 1% above the Stifel/consensus forecast of €57.9 million.

The Pharmagest division, which constitutes 75% of Equasens’ group revenue, showed stability between the third and fourth quarters. Despite a 2.9% reported increase in the fourth quarter, the division experienced a 1.1% l-f-l decline. Meanwhile, the Axigate Link sector, representing 15% of group revenue, returned to high single-digit (HSD) organic growth with a 7.7% rise in Q4 after modest growth earlier in the year.

The company’s smaller e-Connect division, accounting for 5% of group revenue, continued to struggle with a 10.1% decline in the fourth quarter, partly due to regulatory phasing.

Looking ahead to 2025, Equasens provided an optimistic outlook, expecting positive momentum in the first half of the year and nearly 10% organic growth in the second half. The acceleration is anticipated to be driven by previous investments and a faster shift to Software (ETR:SOWGn) as a Service (SaaS) models, although specific divisions affected by this transition were not detailed. Current expectations for 2025 project 9.2% l-f-l growth.

The company also noted an improvement in the French pharmacy market, with nearly no net closures from August to December 2024, a stark contrast to approximately 300 closures from January to August. Equasens capitalized on this environment, gaining market share in the second half of the year.

Stifel analysts have reiterated their ’Buy’ recommendation for Equasens, stating: "At 8x EBITDA 2025E, we believe Equasens is materially undervalued given that its momentum is set to improve in 2025 on the back of: (1) improved health of end-customers (no net pharmacy closures in France between August and December), (2) new product launches scaling, (3) some regulatory tailwind, (4) much easier comparison basis." This positive sentiment from analysts likely contributed to the stock’s upward movement in the trading session.

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