Evotec SE – Partner for Drug Discovery and Development

Brief summary for investors: Evotec SE is a German, global service provider for the pharmaceutical and biotechnology industry. The company operates in a high-growth environment driven by outsourcing trends, but currently exhibits significant operational weaknesses.

Development The share price reached an all-time high of over €40 in 2021, driven by strong profitability (EBITDA of €298.4 million) and high free cash flows that year. Since then, there has been a steady downward trend to below €10. This development directly correlates with the continuously deteriorating profitability. After a profitable 2021, the company recorded significant losses in 2022 and 2023, which continued into the current fiscal year 2025 (Q1-Q2) with negative EBITDA and EBIT margins. The weak performance contrasts with the stable sales growth of previous years, indicating significant margin and cost problems.

Opportunities:

• Industry Trend: The continued outsourcing of R&D activities by pharmaceutical companies (Big Pharma partners such as Bayer, Pfizer, Novo Nordisk) offers long-term growth potential.
• Broad Portfolio: Activities in numerous therapeutic areas diversify risk and open up various growth markets.
• Operating Strength: Positive free cash flow generation despite losses (€50.4 million in the last quarter) demonstrates intact operating liquidity.

Risks:

• Persistent Losses: The negative margins (EBITDA, EBIT, net) in recent quarters and years are the central problem. The profitability metrics (ROA, ROE) are alarmingly negative.
• Deteriorating order situation: The declining revenue over the last three quarters (from €221 million to €171 million) could indicate a loss of customers or projects.
• High debt: A debt-to-equity ratio of 1.14 increases the financial risk given the current loss-making situation.

Additional information: A member of the Management Board purchased a significant amount of shares in August 2025 (approximately 50,000 shares at €5.92). This may, but does not necessarily, constitute a signal of confidence.

Conclusion: Evotec operates in a structurally advantaged market but is caught in a severe operational crisis. The ongoing losses and the recent decline in revenue outweigh the positive long-term industry trends. An investment is currently highly speculative and requires management to resolve the profitability issues quickly and sustainably. The data do not allow a positive assessment.

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.