Expert System

MI: EXSY

€63.7m market cap

€1.78 last close

Expert System has developed and patented technology that extracts useful information from unstructured text using semantic-based techniques and applies it to verticals such as enterprise search, customer experience management and big data analytics.

Investment summary

Expert System’s FY18 results were in line with guidance set a year ago, confirming that revenue growth approaching 10% was not at the expense of profitability. Management is maintaining its targets for FY19, expecting revenue growth to accelerate to 15–20% as the market for cognitive computing becomes more mature. The strong FY18 performance gives us confidence in Expert’s ability to achieve FY19 targets. If this strong revenue and profit momentum can be maintained, the stock looks attractively valued.

Y/E Dec
Revenue (€m)
EBITDA (€m)
PBT (€m)
EPS (c)
P/E (x)
P/CF (x)
2017A 27.8 1.7 (5.4) (18.3) N/A N/A
2018A 30.5 4.6 (0.6) (1.4) N/A 24.6
2019E 34.8 7.6 1.3 3.3 53.8 9.2
2020E 38.9 9.8 3.1 7.9 22.5 7.1
Last updated on 25/04/2019
Industry outlook

Ever-increasing amounts of data are being produced, 80% of which are estimated to be unstructured. The need to derive useful insights from this growing body of data is driving the demand for cognitive computing and smarter artificial intelligence solutions, such as those offered by Expert System. Allied Market Research estimates that the global text analytics market could be worth as much as US$6.5bn by 2020, growing at a CAGR of 25.2% from 2014, with North America expected to be the largest regional market.

Last updated on 25/04/2019
Sector
TMT
Share price graph
Balance sheet
Forecast net debt (€m) 11.9
Forecast gearing ratio (%) 85
Price performance
%
1m
3m
12m
Actual 6.6 36.5 48.5
Relative* 3.5 25.1 62.9
52-week high/low €1.8/€1.1
*% relative to local index
Key management
Stefano Spaggiari CEO
Maria Guidotti Mistrali CFO
Claudio Palmolungo Executive VP Europe
Daniel Mayer Expert System Enterprise
Marco Varone CTO