Expert System

MI: EXSY

€61.5m market cap

€1.72 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 H118 results confirmed year-on-year sales growth of 52% and positive EBITDA. Over the last year the business has seen strong demand for subscription licensing, resulting in recurring revenue increasing to 50% from 38% in H117. Management remains confident of meeting its FY18 guidance and we make minimal changes to our forecasts. The company recently announced a partnership with Rabobank for cognitive artificial intelligence.

Y/E Dec
Revenue (€m)
EBITDA (€m)
PBT (€m)
EPS (c)
P/E (x)
P/CF (x)
2016A 25.1 (2.2) (6.1) (22.0) N/A 21.2
2017A 27.8 1.7 (5.4) (18.3) N/A N/A
2018E 30.5 4.6 (1.5) (3.7) N/A 21.0
2019E 34.8 7.0 0.7 1.7 100.9 9.3
Last updated on 19/03/2019
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 19/03/2019
Sector
TMT
Share price graph
Balance sheet
Forecast net debt (€m) 12.7
Forecast gearing ratio (%) 83
Price performance
%
1m
3m
12m
Actual 3.3 47.2 29.4
Relative* (2.3) 30.1 37.4
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