JB Capital gives an upside potential of 28% to the Izertis share

The independent financial services firm JB Capital has presented the initial coverage report of the company specialised in ICT services and digital transformation Izertis, with a "Buy" recommendation and a "target price of 10.25 euros per share". This represents a potential upside of 28% compared to last Friday's market closing price.

The publication of this sponsored report coincides with Izertis' third year of trading since it joined BME Growth (formerly MAB) in November 2019. Since then, the technology consultancy firm has multiplied its market capitalisation value by 4.7 times. It debuted on the stock exchange with a starting price of €1.70 per share, which represented a value of €36.2 million. 36 months later, its market capitalisation exceeds 198 million.

The report mentions that Izertis operates in a high-growth sector, which "has performed much better than the Spanish GDP in the last decade". The company has "far outpaced the sector's growth in recent years, thanks to its offering of high value-added services and its acquisition policy".  JB Capital expects this trend to continue in the future, with organic growth "well above the sector, which will also be boosted by its inorganic growth plan".

This is the second financial services entity to initiate coverage of the Izertis share, after the monitoring started by GVC Gaesco in November 2021, in which it set a Buy recommendation and a target price of €9.70/share.

With regard to the objectives of the 2020-2023 Strategic Plan of the digital transformation specialist, the firm chaired by Javier Botín states that Izertis "will reach a turnover of 127 million euros in 2023 (above the 125 million euros forecast by the company), by combining organic and inorganic growth. Meanwhile, in terms of normalised Ebitda, it expects to exceed by far the 12.5 million euros estimated by the technology company, reaching 15.3 million euros".

Regarding the operating results, the firm estimates that the consultancy firm "will continue to improve its margins in the coming years, with a forecast of going from a normalised Ebitda margin of 12.0% in 2023 to 13.7% in 2027". All this from a "healthy financial situation, as it expects the Net Financial Debt / normalised Ebitda ratio to evolve from 2.1 times in 2023 to 0.4 times in 2027". In addition, JB Capital expects that "after the successful achievement of the current 2020-2023 Strategic Plan, Izertis will present a new Strategic Plan next year, which could be a positive catalyst for the stock".

Three years as a listed company

In its first session on the BME Growth, on 25 November 2019, the company closed with a 47.06% rise in share price, which was the best debut of the year for a company on this market. In this line, after only 7 months since its entry into the segment, it achieved its incorporation into the IBEX Growth Market 15, where the companies with the highest trading volume are included. Thus, its capitalisation has gone from 36.2 million euros on its first day to the 198 million euros it currently holds.

Its 2020-2023 Strategic Plan is designed to achieve a turnover of 125 million euros and a normalised Ebitda of 12.5 million euros in this period. This would be backed by a CAGR (Constant Annual Growth Rate) of both figures of more than 25% over the last 11 years.

In the audited results presented in 2021, Izertis achieved a turnover of 65.05 million euros, with a normalised Ebitda of 7.27 million euros. At the end of the first half of 2022, these same figures increased by 31.3% and 67.9%, respectively, compared to the same period of the previous year.

Izertis has offices in Europe, America and Africa, as well as projects in more than 50 countries. Currently, its teams are made up of more than 1,600 professionals working for clients from multiple sectors and disciplines, including the main IBEX 35 companies and large public administrations both in Spain and internationally.

"This report is for us a great recognition of the efforts of the entire Izertis team and also an incentive to continue with our projection. Our main corporate focus is on profitable growth, and reports like this one from JB Capital give us extra motivation to continue increasing the company's visibility among potential shareholders and investors," has highlighted Rafael Cavanillas, Director of Investor Relations and Business Development at Izertis, following the release of the report.