paragon (PGN)

Business description

paragon designs and manufactures advanced automotive electronics solutions as a direct supplier to the automotive industry. Products include: sensors, acoustics, cockpit, electromobility and body kinematics.

Investment summary

We forecast a three-year CAGR (FY17e-FY19e) in revenues of c 26%, driven by €1.2bn lifetime order backlog, and a three-year CAGR (FY17e-FY19e) in EPS of 63% by factoring into the benefits of production automation in Delbrück. We maintain our fair value of €82.1/share based on our DCF approach. Our revenues and earnings forecasts are broadly in line with consensus. Based on Q317 results, both paragon and its 60%-owned subsidiary, Voltabox, are on track to achieve FY17 guidance.

Last updated on 02/02/2018

Y/E Dec Revenue (€m) EBITDA (€m) PBT (€m) EPS (fd) (c) P/E (x) P/CF (x)
2015A 95.0 14.1 5.0 82.7 93.1 N/A
2016A 102.8 16.1 5.8 84.4 91.2 N/A
2017E 123.8 19.3 7.8 116.0 66.4 N/A
2018E 155.7 25.7 13.1 194.5 39.6 N/A

Last updated on 18/01/2018

Latest video

Executive Interview - paragon

Industry outlook

We believe the growth story of paragon is understood by the capital market, following the successful issue of €50m bonds in June 2017 and the spin-off of its subsidiary, Voltabox, in October 2017 to raise gross proceeds of €152m. In order to generate further appreciation of its share price, paragon needs not only to deliver on its €1.2bn lifetime order backlog, but also to create further growth engines.

Last updated on 02/02/2018

Key management

Klaus Frers, CEO

Company address

Schwalbenweg 29
Delbrück
33129
Germany
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