Kontron AG (KTN.VI) | Investment Case

1. Company Snapshot

1.a. Company Description

Kontron AG engages in the development, implementation, and marketing of hardware and software solutions, and IT services.It operates through three segments: IT Services, IoT Solutions Europe, and IoT Solutions America.The company offers consulting, integration, and outsourcing services in the areas of workplace, data centers, cloud, and application support and development; and consults and sells third-party hardware and software products.

It also develops hardware and software products and solutions for Internet of Things and Industry 4.0 applications, including the associated implementation and operating services for industrial automation, medical technology, rail infrastructure, communications, and smart energy markets.In addition, the company offers in-flight entertainment systems, digital signage solutions for public transport, carrier-grade servers for telecommunication companies, and autonomous driving solutions.It operates in Germany, Austria, North America, Hungary, Poland, Russia, Romania, Czech Republic, Slovenia, China, Croatia, France, Switzerland, Great Britain, Bulgaria, and internationally.

The company was formerly known as S&T AG and changed its name to Kontron AG in June 2022.Kontron AG was founded in 1990 and is headquartered in Linz, Austria.

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1.b. Last Insights on KTN

Kontron AG's recent performance was negatively impacted by questionable earnings quality, despite reporting robust earnings. The company's revenue miss of 5.5% against analyst estimates also raised concerns. However, the company has made strategic moves, including a new distribution strategy and partnership with EIZO Rugged Solutions to expand its VPX portfolio. Additionally, Kontron announced a development of control systems for a multinational energy equipment manufacturer, poised for $100M in growth. Its strengthened defense aerospace supply chain through a distribution agreement with Spirit Electronics also bodes well.

1.c. Company Highlights

Last Price	22.56
Change Percentage	-0.88%
Open	22.66
Previous Close	22.76
Market Cap ( Millions)	1386
Volume	1589
Year High	28.98
Year Low	17.15
M A 50	24.47
M A 200	24.23

FCF Yield	4.14%
Dividend Yield	2.66%
ROE	22.21%
Debt / Equity	66.56%
Net Debt / EBIDTA	98.73%
Price To Book	2.05
Price Earnings Ratio	9.76
Price To FCF	24.17
Price To sales	0.85
EV / EBITDA	6.55

2. Transcript Summary

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3. NewsRoom

Kontron's (ETR:SANT) Earnings Are Of Questionable Quality

Nov -13

Source:

Kontron to Power Multinational Energy Equipment Manufacturer with Control Systems in a Market Poised for $100M in Growth

Nov -11

Source:

Revenue Miss: Kontron AG Fell 5.5% Short Of Analyst Revenue Estimates And Analysts Have Been Revising Their Models

Nov -08

Source:

Kontron Launches New Distribution Strategy and Gains Broadest Embedded Module Roadmap in the Western Hemisphere

Nov -03

Source:

Kontron and EIZO Rugged Solutions Inc. Partner to Expand VPX Portfolio with Complete CPU/GPU Platforms for Mission-Critical Applications

Oct -09

Source:

Will Weakness in Kontron AG's (ETR:SANT) Stock Prove Temporary Given Strong Fundamentals?

Sep -08

Source:

Kontron Strengthens Defense Aerospace Supply Chain by Appointing Spirit Electronics as Official Distributor

Aug -27

Source:

Kontron Second Quarter 2025 Earnings: EPS Beats Expectations, Revenues Lag

Aug -12

Source:

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (6.62%)

6. Segments

Europe

Expected Growth: 4.83%

Kontron AG's 4.83% growth in Europe is driven by increasing demand for IoT and Industry 4.0 solutions, expansion in the aerospace and defense sector, and growing adoption of 5G and edge computing technologies. Additionally, the company's strategic acquisitions and partnerships have enhanced its product offerings and strengthened its market position.

Software + Solutions

Expected Growth: 10.55%

Kontron AG's Software + Solutions segment growth of 10.55% is driven by increasing demand for IoT and Industry 4.0 solutions, expansion in emerging markets, and strategic acquisitions. Additionally, the company's focus on digital transformation, cybersecurity, and data analytics is contributing to its growth.

Global

Expected Growth: 9.08%

Kontron AG's 9.08% growth is driven by increasing demand for IoT and Industry 4.0 solutions, expansion in the Americas and Asia, and strategic acquisitions. The company's focus on high-growth markets such as transportation, industrial automation, and medical technology also contributes to its growth.

7. Detailed Products

Embedded Boards

Kontron AG offers a range of embedded boards, including single-board computers, motherboards, and modules, designed for industrial, transportation, and medical applications.

Box PCs and HMIs

Kontron's box PCs and HMIs are designed for industrial and transportation applications, offering ruggedized and customizable solutions for data processing and visualization.

IoT Gateways

Kontron's IoT gateways enable secure and reliable data transmission and processing for industrial IoT applications, including industrial automation, transportation, and smart cities.

Custom Solutions

Kontron offers custom design and manufacturing services for OEMs and ODMs, providing tailored solutions for specific industry requirements.

Software and Tools

Kontron provides a range of software and tools, including operating systems, device management, and security solutions, designed to support industrial and IoT applications.

Rugged Mobile Computing

Kontron's rugged mobile computing solutions are designed for harsh environments, offering reliable and secure mobile computing for industrial, transportation, and public safety applications.

Avionics and Defense

Kontron provides ruggedized computing solutions for avionics and defense applications, meeting the highest standards for reliability, security, and performance.

8. Kontron AG's Porter Forces

Forces Ranking

Threat Of Substitutes

Kontron AG operates in the industrial computer hardware and IoT solutions industry, where substitutes are limited. However, the increasing adoption of cloud computing and software-defined infrastructure may pose a moderate threat of substitutes.

Bargaining Power Of Customers

Kontron AG's customers are primarily OEMs and system integrators, who have limited bargaining power due to the customized nature of the products and the company's strong relationships with its clients.

Bargaining Power Of Suppliers

Kontron AG relies on a few key suppliers for components and materials. While the company has some bargaining power due to its size and reputation, suppliers may still exert some pressure on prices and delivery terms.

Threat Of New Entrants

The industrial computer hardware and IoT solutions industry has high barriers to entry, including significant capital expenditures and R&D investments. This limits the threat of new entrants and allows Kontron AG to maintain its market position.

Intensity Of Rivalry

The industrial computer hardware and IoT solutions industry is highly competitive, with several established players competing for market share. Kontron AG faces intense rivalry from companies like Advantech, IEI Integration, and others.

9. SWOT Analysis

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

	Value
Debt Weight	27.78%
Debt Cost	6.38%
Equity Weight	72.22%
Equity Cost	8.40%
WACC	7.84%
Leverage	38.47%

11. Quality Control: Kontron AG passed 2 out of 9 key points

Strong Liquidity

Low Deb

Strong Interest Coverage

Healthy Cash Flow

Operating Inefficiency

Strong Return On Equity

Consistent Revenue Growth

Consistent Operating Cash Flow Growth

Margin Improvement

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Asseco SEE

A-Score: 5.8/10

Value: 4.1

Growth: 6.7

Quality: 6.9

Yield: 4.4

Momentum: 9.0

Volatility: 4.0

1-Year Total Return ->

Kontron

A-Score: 5.8/10

Value: 5.8

Growth: 6.8

Quality: 5.5

Yield: 5.0

Momentum: 9.5

Volatility: 2.0

1-Year Total Return ->

Elma Electronic

A-Score: 4.5/10

Value: 2.1

Growth: 6.1

Quality: 5.5

Yield: 0.0

Momentum: 3.5

Volatility: 10.0

1-Year Total Return ->

SIFA

A-Score: 4.1/10

Value: 5.4

Growth: 4.2

Quality: 4.2

Yield: 1.2

Momentum: 3.5

Volatility: 6.3

1-Year Total Return ->

Datalogic

A-Score: 3.5/10

Value: 5.2

Growth: 1.7

Quality: 3.8

Yield: 4.4

Momentum: 2.0

Volatility: 3.7

1-Year Total Return ->

Asetek

A-Score: 2.5/10

Value: 9.0

Growth: 1.1

Quality: 4.0

Yield: 0.0

Momentum: 0.5

Volatility: 0.3

1-Year Total Return ->

Peers Metrics

12.e Scoring ^Insights

12.f DCF ^BETA

Parameters

Short Term Growth

8.87%

Short term Time

10.0

Long-Term Growth

2.00%

WACC

7.84%

Kontron AG - AT0000A0E9W5

1. Company Snapshot

1.a. Company Description

1.b. Last Insights on KTN

1.c. Company Highlights

Higher Yield

Average Quality

Medium Volatility

Lower Growth

Stable Momentum

Weak Momentum

Revenues Miss

Average Yield

Fairly Valued

Average Growth

Earnings Miss

Revenues Beats

Strong Momentum

Earnings Beats

2. Transcript Summary

3. NewsRoom

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (6.62%)

6. Segments

Europe

Expected Growth: 4.83%

Software + Solutions

Expected Growth: 10.55%

Global

Expected Growth: 9.08%

7. Detailed Products

Embedded Boards

Box PCs and HMIs

IoT Gateways

Custom Solutions

Software and Tools

Rugged Mobile Computing

Avionics and Defense

8. Kontron AG's Porter Forces

Forces Ranking

Threat Of Substitutes

Bargaining Power Of Customers

Bargaining Power Of Suppliers

Threat Of New Entrants

Intensity Of Rivalry

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

11. Quality Control: Kontron AG passed 2 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

22.56$

Current Price

22.56$

Potential

-0.00%

Expected Cash-Flows

12.e Scoring ^Insights

12.f DCF ^BETA