CompuGroup Medical SE & Co. KGaA – Software and IT Solutions for Healthcare

Brief Summary for Investors: CompuGroup Medical (CGM) is a leading German provider of software and IT solutions for healthcare with a market capitalization of approximately €1.17 billion. The company serves physicians, pharmacies, hospitals, and consumers and structurally benefits from the advancing digitalization of the healthcare sector.

Development The share price moved sideways around €70 from the end of 2020 to mid-2021 before beginning a multi-year downtrend that reached a low of €14 in October 2024. Since then, the price has recovered to €23. This development correlates with operating performance: Stable revenues and EBITDA in 2020-2022 were accompanied by a significant drop in profit in FY 2023 (EPS: EUR 0.88 vs. EUR 1.41 in the previous year). Recent quarters show volatile results, with a loss in Q4 2024, followed by a recovery to positive EPS in Q1 2025. Profitability metrics (ROE, ROA) are currently low, and debt (debt-to-equity: ~2.1) is high.

Opportunities:

• Structural Growth: Global demand for digitalization and efficiency solutions in healthcare remains intact and provides a long-term foundation for growth.
• Broad Market Coverage: The strong position in the core DACH markets and the international presence offer cross-selling potential and make the company less dependent on individual segments.
• Strong Free Cash Flow: Despite fluctuating earnings, the company consistently generates positive operating cash flows, providing financial flexibility for investments or debt reduction.

Risks:

• Operating Volatility: Fluctuating quarterly results indicate unresolved challenges in profitability or the integration of acquisitions.
• High Debt: A debt-to-equity ratio of over 2 increases financial risks, particularly in a rising interest rate environment, and burdens earnings with interest expenses.
• Competition and Regulation: The sector is highly competitive and heavily regulated; changes in the healthcare system (e.g., reimbursement models) can have a direct impact on business operations.

Additional Information: The large number of employees, over 8,000, indicates a capital-intensive business model with corresponding economies of scale. Current key figures per employee (revenue, EBITDA) provide a benchmark for operational efficiency.

Conclusion: CGM operates in an attractive, long-term growth market. The recent share price recovery indicates some recovery, but the fundamental valuation and profitability remain critical due to the high debt level and volatile earnings performance. For investors, the company represents a speculative bet on a successful operational turnaround strategy and improved profitability. An investment should consider the risks associated with the high debt level and cyclical fluctuations.

Created October 1, 2025. This report was generated by an AI model based on data available to InsiderPie. It is not a recommendation to buy or sell any securities. AI analysis is experimental and may contain inaccuracies.