When we last reported on the software and IT services provider SOFTWAREONE on June 2, the company presented a good, solid business performance for 1Q22. Gross profit increased by +11.5%, but the gross margin decreased from 21.5% to 19.8%; thus, it still remained below the target value of 25%. At the time, SOFTWAREONE maintained its outlook for the full year and continued to expect a strong market environment. Now the software and IT service provider has published its business figures for the first half of the year... and they are impressive! Adjusted for currency effects, gross profit climbed +16% year-on-year to CHF 469.9 million, with growth in 2Q22 improving to +17.2% (vs. the same quarter last year). Adjusted gross profit was CHF 117.9 million, which means that the target margin has now already been cracked at 25.1%. And: the outlook for the full year 2022 was reaffirmed due to the continued strong demand environment!
SOFTWAREONE continues to gain credibility with these encouraging half-year figures and shows that it can meet or even exceed the high expectations. The company keeps growth rates high and inspires for the fourth consecutive quarter with high growth, at least in the mid-teens. The difficulties with costs and profitability seem increasingly under control; with a new efficiency program, the company aims to optimize these factors even more clearly. SOFTWAREONE is continuously leveraging the digital transformation and can keep up the pace or finally gain momentum! The strong business performance should make the stock more attractive, also in terms of valuation. At the very least, this should support the share price and provide additional "vitamins" to initiate a new upward movement. The share has fallen deeply, the lights should now actually switch from orange to green! The price target stands at CHF 19!
