Wavestone: market hardens, share price loses ground

(CercleFinance.com) - Last night, Wavestone reported organic sales growth of just 1% for the 1st quarter of its 2024/2025 financial year, while confirming its full-year targets.


For the three months to the end of June, the technology consulting group posted consolidated sales of 232.4 million euros, a total increase of 62% on Q1 2023/24.

This performance includes the accounts of Q_Perior, a German consulting firm, and Aspirant Consulting, a US firm.

On a 'pro forma' basis, sales for Q1 2024/25 showed slight organic growth of 1%, in an economic environment that the company itself admits is 'hardening'.

'The first quarter is in line with expectations, but the discourse is becoming more cautious in the face of negative signals linked to the political situation in France', emphasize analysts at TP ICAP Midcap.

In its press release, Wavestone acknowledges that demand is proving less buoyant than expected at the start of the 2024/2025 financial year, with a more marked wait-and-see attitude on the part of principals, particularly in France in May, then in June due to the electoral context.

Despite this unfavorable environment, Wavestone reiterates its target of annual growth in the order of 3% to 5% on pro forma 2023/24 sales, with a recurring operating margin in excess of 13%.

Following these announcements, Wavestone shares were down by more than 5% on Thursday on the Paris Bourse.

TP ICAP Midcap analysts nevertheless consider that the stock's decline since the dissolution of the French National Assembly has given it an "interesting" upside, leading them to return to buy.

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