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1. Company Snapshot

1.a. Company Description

1&1 AG, together with its subsidiaries, operates as a telecommunications provider in Germany.The company operates through Access and 5G segments.It provides broadband and mobile services; and wireless access and landline products that include related applications, such as home networks, online storage, telephony, and video on demand or international protocol television.


The company also offers wireless network services using the network of Telefónica; and 5G mobile network services, as well as develops software solutions.In addition, it provides marketing, sales, logistics, customer, financial controlling, receivables, and risk management services; network planning services; information technology services; and product management services, as well as operates a data center.The company operates under the brand names of 1&1, yourfone, smartmobil.de, winSIM, PremiumSIM, simply, maxim, DeutschlandSIM, sim.de, eteleon, discoTEL, M2M-Mobil, handyvertrag.de, and Galaxy EXPERTE brands.


It serves approximately 11.2 million mobile and 4.2 million broadband customers.The company was founded in 1988 and is headquartered in Maintal, Germany.1&1 AG is a subsidiary of United Internet AG.

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1.b. Last Insights on 1U1

1&1 AG's recent performance was driven by resilient investor sentiment, as shareholders appeared unconcerned with the company's soft earnings report. The company's Q1 2025 results showed a decline in EPS to €0.27 from €0.47 in Q1 2024, but revenue remained flat at €1.02 billion. Notably, the company's 3Q 2024 results showed a decrease in net income, which may have been a temporary blip. However, the company's ability to maintain revenue levels despite a decline in earnings suggests a stable business condition. Additionally, the company's recent focus on expanding its product offerings and improving operational efficiency may have contributed to its stable financial performance.

1.c. Company Highlights

2. Transcript Summary

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3. NewsRoom

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4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (2.00%)

6. Segments

Access

Expected Growth: 2.0%

Strong demand for cloud infrastructure and digitalization in Europe, driven by increasing adoption of online services and e-commerce, coupled with 1&1 AG's strategic expansion into new markets and innovative product offerings, have contributed to this level of growth.

7. Detailed Products

Domain Registration

1&1 AG offers domain registration services, allowing customers to register and manage their domain names.

Web Hosting

1&1 AG provides web hosting services, including shared hosting, virtual private servers, and dedicated servers.

E-commerce Solutions

1&1 AG offers e-commerce solutions, including online store builders and shopping cart software.

Website Builder

1&1 AG provides a website builder tool, allowing users to create and design websites without coding.

Server and Cloud Services

1&1 AG offers server and cloud services, including cloud servers, cloud storage, and cloud databases.

Email and Collaboration

1&1 AG provides email and collaboration services, including email hosting, calendar, and contact management.

Security and Backup

1&1 AG offers security and backup services, including SSL certificates, antivirus software, and backup solutions.

Marketing and SEO

1&1 AG provides marketing and SEO services, including search engine optimization, online advertising, and website analytics.

8. 1&1 AG's Porter Forces

Forces Ranking

Threat Of Substitutes

The threat of substitutes for 1&1 AG is moderate, as customers have some alternatives for internet and telecommunication services, but the company's strong brand and quality of services reduce the likelihood of customers switching to substitutes.

Bargaining Power Of Customers

The bargaining power of customers is low, as 1&1 AG has a large customer base and offers a wide range of services, making it difficult for individual customers to negotiate prices or terms.

Bargaining Power Of Suppliers

The bargaining power of suppliers is moderate, as 1&1 AG relies on a few large suppliers for network infrastructure and equipment, but the company's size and market position give it some negotiating power.

Threat Of New Entrants

The threat of new entrants is low, as entering the telecommunications market requires significant investment in infrastructure and technology, and 1&1 AG's established brand and customer base make it difficult for new entrants to gain traction.

Intensity Of Rivalry

The intensity of rivalry is high, as the telecommunications market is highly competitive, with several large players competing for market share, and 1&1 AG must continually innovate and invest in its services to remain competitive.

9. SWOT Analysis

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 3.10%
Debt Cost 6.56%
Equity Weight 96.90%
Equity Cost 6.56%
WACC 6.56%
Leverage 3.20%

11. Quality Control: 1&1 AG passed 4 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

Stock-Card
Freenet

A-Score: 6.3/10

Value: 6.6

Growth: 3.2

Quality: 7.5

Yield: 9.4

Momentum: 4.0

Volatility: 7.0

1-Year Total Return ->

Stock-Card
Telia Company

A-Score: 6.2/10

Value: 4.4

Growth: 2.6

Quality: 4.0

Yield: 9.4

Momentum: 7.5

Volatility: 9.3

1-Year Total Return ->

Stock-Card
United Internet

A-Score: 5.6/10

Value: 5.9

Growth: 4.4

Quality: 3.0

Yield: 6.9

Momentum: 9.0

Volatility: 4.7

1-Year Total Return ->

Stock-Card
Airtel Africa

A-Score: 5.4/10

Value: 3.9

Growth: 4.9

Quality: 5.2

Yield: 4.4

Momentum: 10.0

Volatility: 4.3

1-Year Total Return ->

Stock-Card
Elisa

A-Score: 5.0/10

Value: 3.9

Growth: 4.0

Quality: 6.6

Yield: 8.1

Momentum: 2.5

Volatility: 4.7

1-Year Total Return ->

Stock-Card
1&1

A-Score: 4.4/10

Value: 6.5

Growth: 3.3

Quality: 4.1

Yield: 0.0

Momentum: 9.5

Volatility: 3.0

1-Year Total Return ->

Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

24.2$

Current Price

24.2$

Potential

-0.00%

Expected Cash-Flows