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1. Company Snapshot

1.a. Company Description

Alten S.A. operates as an engineering and technology consultancy company in France, North America, Germany, Scandinavia, Benelux, Spain, Italy, the United Kingdom, the Asia-Pacific, Switzerland, Eastern Europe, and internationally.The company undertakes design and research projects for the technical and information systems divisions in the industrial, telecommunications, and service sectors.It offers engineering, and research and development outsourcing services, such as digital transformation; product design and development; manufacturing engineering; supply chain and quality; customer service and training; and project and change management services.


The company also provides IT services comprising consulting and digital transformation; technical services for digital, big data, data science, and artificial intelligence; development, maintenance, and testing of applications; and cloud, and networks and security infrastructure services.It serves customers in aeronautics, space, defense and naval, security, automotive, rail, energy and environment, life sciences, banking, finance, insurance, telecoms and media, retail and consumer services, and public sectors.Alten S.A. was incorporated in 1988 and is based in Boulogne-Billancourt, France.

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1.b. Last Insights on ATE

Alten S.A.'s recent performance was negatively impacted by the divestiture of its Worldgrid business to Atos for $294 million. Although this deal may provide a one-time boost to cash reserves, it also represents a significant loss of revenue and expertise. The company's workforce expansion and steady revenue growth in Q2 2024, as reported in the earnings call, may be offset by the challenges of integrating the remaining operations and adapting to the changing market landscape. The divestiture may also raise concerns about the company's strategic outlook for the second half of 2024.

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 (6.79%)

6. Segments

Automotive/ Rail

Expected Growth: 7.5%

Alten S.A.'s 7.5% growth in Automotive/Rail is driven by increasing demand for electric and autonomous vehicles, rising need for sustainable transportation, and growing investments in rail infrastructure. Additionally, the company's expertise in digitalization, electrification, and safety solutions positions it well to capitalize on these trends.

Trade, Services, Media and Public Sector

Expected Growth: 6.2%

{'Trade': 'E-commerce expansion, increased online shopping, and strategic partnerships drive growth.', 'Services': 'Digital transformation, IT consulting, and outsourcing services fuel growth.', 'Media': 'Rise of digital media, increasing demand for online content, and innovative advertising solutions contribute to growth.', 'Public Sector': 'Government investments in digital infrastructure, cybersecurity, and IT modernization drive growth.'}

Aerospace

Expected Growth: 6.5%

Alten S.A.'s Aerospace segment growth of 6.5% is driven by increasing demand for lightweight and fuel-efficient aircraft, growing adoption of digital technologies, and rising investments in space exploration. Additionally, the segment benefits from Alten's strong relationships with major OEMs, its expertise in systems engineering and integration, and the growing need for cybersecurity solutions in the aerospace industry.

Banking, Finance and Insurance

Expected Growth: 5.5%

Alten S.A.'s 5.5% growth in Banking, Finance, and Insurance is driven by increasing demand for digital transformation, regulatory compliance, and risk management. The company's expertise in cloud-based solutions, data analytics, and cybersecurity also contribute to its growth. Additionally, the rising need for cost optimization and process automation in the BFSI sector further fuels Alten's expansion.

Life Sciences

Expected Growth: 7.8%

Alten S.A.'s Life Sciences segment growth of 7.8% is driven by increasing demand for digital healthcare solutions, growing adoption of precision medicine, and rising investments in R&D by pharmaceutical and biotechnology companies. Additionally, the segment benefits from Alten's expertise in data analytics, artificial intelligence, and cybersecurity, which are critical components of modern life sciences research and development.

Energy

Expected Growth: 6.8%

Alten S.A.'s 6.8% growth in Energy segment is driven by increasing demand for renewable energy, government incentives for clean energy, and rising energy consumption in emerging markets. Additionally, Alten's strategic partnerships and expansion into new geographies have contributed to its growth.

Defense and Security/Maritime

Expected Growth: 6.0%

Alten S.A.'s Defense and Security/Maritime segment growth of 6.0% is driven by increasing global security concerns, rising naval modernization efforts, and growing demand for cybersecurity solutions. Additionally, the segment benefits from Alten's expertise in naval architecture, systems integration, and digital services, as well as its strong relationships with key defense contractors and governments.

Industries

Expected Growth: 7.2%

Alten S.A.'s 7.2% growth is driven by increasing demand for digital transformation, cloud computing, and cybersecurity services. The company's expertise in IT consulting, engineering, and innovation enables it to capitalize on the growing need for businesses to adapt to new technologies. Additionally, Alten's strong presence in the aerospace, automotive, and energy sectors contributes to its growth, as these industries invest in digitalization and innovation.

Telecoms

Expected Growth: 7.0%

Alten S.A.'s Telecoms segment growth of 7.0% is driven by increasing demand for 5G network infrastructure, growing adoption of IoT devices, and rising need for digital transformation in the telecom industry. Additionally, the segment benefits from Alten's expertise in network engineering, cybersecurity, and data analytics, enabling telecom operators to improve their operational efficiency and customer experience.

Electronic

Expected Growth: 8.0%

Alten S.A.'s Electronic segment growth of 8.0% is driven by increasing demand for digital transformation, IoT, and 5G technologies. Strong partnerships with key OEMs, expanding presence in emerging markets, and investments in R&D to develop innovative solutions also contribute to this growth.

7. Detailed Products

Engineering Services

Alten S.A. provides engineering services to various industries, including aerospace, automotive, and energy. These services include design, development, testing, and validation of complex systems and products.

IT Consulting

Alten S.A. offers IT consulting services to help clients optimize their IT systems, improve efficiency, and reduce costs. Services include IT strategy, architecture, and implementation.

Digital Transformation

Alten S.A. helps clients undergo digital transformation by providing services such as digital strategy, innovation, and technology implementation.

Data Science and Analytics

Alten S.A. provides data science and analytics services to help clients extract insights from their data, including data strategy, data engineering, and data visualization.

Cybersecurity

Alten S.A. offers cybersecurity services to help clients protect their systems and data from cyber threats, including risk assessment, penetration testing, and incident response.

Cloud and Infrastructure

Alten S.A. provides cloud and infrastructure services to help clients design, implement, and manage their cloud and infrastructure environments.

8. Alten S.A.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Alten S.A. operates in a niche market with limited substitutes, but the threat of substitutes is still present due to the evolving nature of the industry.

Bargaining Power Of Customers

Alten S.A.'s customers are largely dependent on the company's services, giving them limited bargaining power.

Bargaining Power Of Suppliers

Alten S.A. relies on a diverse range of suppliers, reducing the bargaining power of individual suppliers.

Threat Of New Entrants

The industry in which Alten S.A. operates is highly competitive, with low barriers to entry, making it easier for new entrants to join the market.

Intensity Of Rivalry

The industry in which Alten S.A. operates is highly competitive, with many established players, leading to a high intensity of rivalry.

9. SWOT Analysis

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 15.30%
Debt Cost 4.91%
Equity Weight 84.70%
Equity Cost 11.11%
WACC 10.16%
Leverage 18.06%

11. Quality Control: Alten S.A. passed 5 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
Wise

A-Score: 6.0/10

Value: 4.9

Growth: 9.2

Quality: 8.0

Yield: 0.0

Momentum: 9.0

Volatility: 4.7

1-Year Total Return ->

Stock-Card
Sopra Steria

A-Score: 5.2/10

Value: 8.3

Growth: 5.7

Quality: 5.0

Yield: 4.4

Momentum: 2.5

Volatility: 5.3

1-Year Total Return ->

Stock-Card
Softcat

A-Score: 5.2/10

Value: 2.0

Growth: 5.8

Quality: 8.0

Yield: 3.1

Momentum: 5.0

Volatility: 7.0

1-Year Total Return ->

Stock-Card
Alten

A-Score: 4.8/10

Value: 7.5

Growth: 6.7

Quality: 5.5

Yield: 3.1

Momentum: 1.5

Volatility: 4.3

1-Year Total Return ->

Stock-Card
Lagercrantz Group

A-Score: 4.4/10

Value: 0.7

Growth: 8.3

Quality: 6.2

Yield: 1.2

Momentum: 5.5

Volatility: 4.7

1-Year Total Return ->

Stock-Card
Network International

A-Score: 3.6/10

Value: 1.8

Growth: 6.8

Quality: 6.1

Yield: 0.0

Momentum: 4.0

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

69.55$

Current Price

69.55$

Potential

-0.00%

Expected Cash-Flows