July 20, 2023
Summary
Provides management consultancy services, United Kingdom
Market cap £240 MM (pounds)
Micro cap
Growth of 70% CAGR last 3 years
Growth of more than 24% is forecast for 2023
EBIT margins of 23%
Grows organically at 25% and through acquisitions
The company has no debt (net cash)
The CEO owns 29% of the shares
20% ROIC
Sales come mainly from Europe and the US
More than 500 workers and 200 customers
Unknown company with few history
Low liquidity (illiquid company, trades few shares per day)
Industry grows between 15% ~ 20% CAGR
Low valuation 14x FCF and 9x EBITDA
Stock market preformance
The company went public in 2020 at a price of £2
Currently trading at a price of £5.20
1. Business
Elixirr is a digital consulting company based in the United Kingdom. Founded in 2009 by CEO Stephen Newton, the company has seen notable growth since its inception. Elixirr currently has over 500 employees and serves over 200 customers in the UK, Europe and the US.
At the core of its operation is the digital transformation industry. Elixirr specializes in helping its clients take their traditional businesses towards more modern and efficient digital business models. His focus is on advising companies on how to use technology to improve their operations and services.
Elixirr operates under three business pillars: management consulting, marketing modernization and business transformation. It offers a wide range of services spanning various industries, including automotive and transportation, manufacturing, business and financial services, energy, utilities, healthcare and pharmaceuticals, insurance, luxury and fashion, travel and leisure, telecommunications, technology, retail, goods consumer, media and entertainment.
With its multidisciplinary approach and experience in various industries, Elixirr has positioned itself as a strategic partner for companies seeking to innovate and adapt in the digital era. Its strong team of consultants works closely with clients to drive change and growth in an increasingly competitive and digitalized business environment.
1.1. Business lines
Elixirr has established a diversified presence in multiple strategic industries, which are projected as recurring and growth areas in the coming years. With a focus on versatility and adaptability, the company offers a wide range of services spanning various sectors, demonstrating its ability to respond to changing market dynamics.
Automotive and Transportation: Elixirr offers strategic and technology consulting services for companies in the automotive and transportation industries. This may include mobility strategies, supply chain optimization, development of electric and autonomous vehicles, and digital transformation of the customer experience.
Industrial: The company provides solutions for the manufacturing industry, including process optimization, implementation of Industry 4.0 technologies, improving operational efficiency and innovation in products and services.
Business and Financial Services: Elixirr works with clients in the business and financial services sector to develop growth strategies, improve customer experience, optimize operations and manage risks.
Energy and Utilities: The company offers consulting services for energy and utility companies, including strategic planning, asset management, the transition to renewable energy and the digitalization of energy infrastructure.
Healthcare and Pharmaceuticals: Elixirr provides solutions for organizations in the healthcare and pharmaceutical sectors, including supply chain optimization, improving patient care, pharmaceutical innovation, and the implementation of digital health technologies.
Insurance: The company collaborates with insurance companies to develop growth strategies, improve customer experience, optimize underwriting and claims processes, and effectively manage risks.
Luxury and Fashion: Elixirr offers consulting services for companies in the luxury and fashion sector, including brand strategies, international expansion, supply chain optimization and improving online and offline customer experience.
Travel and Leisure: The company works with companies in the travel and leisure industry to develop growth strategies, improve customer experience, optimize operations and take advantage of digitalization and personalization opportunities.
Telecommunications: Elixirr provides solutions for companies in the telecommunications sector, including network expansion strategies, service and product optimization, customer experience management and digital transformation.
Consumer: The company offers consulting services to companies in the consumer sector, including marketing and sales strategies, product innovation, supply chain optimization and customer experience management.
Elixirr has a solid and diversified presence in 15 key industries, which are projected to be recurring and growing in the coming years. Its services cover a wide range of sectors, including automotive and transportation, manufacturing, commercial and financial services, energy, utilities, health and pharmaceuticals, insurance, luxury and fashion, travel and leisure, telecommunications, consumer, among others.
1.2 Expertise of the company
During 2022, Elixirr International experienced strong business performance, consolidating its position as a leader in the consulting and business services market. With a broad range of more than 20 services, the company is strategically positioned to provide comprehensive support to its clients in a variety of business challenges, including business transformation and cost optimization, critical objectives for any company.
Among the featured services are:
Big Data: Elixirr anticipates significant growth in this segment, with a projected 30% compound annual growth through 2026, and a market expected to exceed $100 billion.
Machine Learning: The company foresees even faster growth in this space, with a compound annual growth rate of 39% in the coming years and a global market that is estimated to reach $80 billion by 2026.
Artificial Intelligence (AI): The AI market is expected to continue expanding at a rate of 20% CAGR, with an estimate close to $900 billion by 2026.
In addition to these specialized services, Elixirr offers solutions ranging from application design and development to digital strategies and improving the consumer experience. This diversity of offerings allows the company to adapt to changing market needs and offer tailored solutions for each client.
1.3 Geographical lacations
The company has a strong presence in various strategic locations, including the United Kingdom, the United States, Mexico, Europe and South Africa, where it operates with specialized teams. These geographic areas are characterized by political stability and strong economies, providing a conducive environment for business development.
The distribution of clients and projects is mainly concentrated in these regions and nearby areas, reflecting a strategy focused on understanding and satisfying local market needs. This geographic proximity not only strengthens the relationship with existing customers, but also provides a solid foundation for future expansion.
Further expansion into current areas represents an exciting opportunity for the company's continued growth in the years to come. The presence in the United States and Mexico offers strategic advantages in terms of schedule, language and cultural understanding, facilitating possible expansion into Canada and other Latin American markets.
Likewise, the geographical proximity to countries close to the United Kingdom and Croatia opens new possibilities for growth in those regions. With a global team of more than 500 highly trained consultants, designers and engineers, the company is well positioned to capitalize on these opportunities and continue its business success.
Elixirr stands out for its commitment to developing internal talent, fostering a culture that values and empowers its employees as partners in the company's growth and success. This philosophy drives innovation, excellence in customer service and the commitment of the entire team to the company's vision and objectives.
2. Growth of the company
2.1 Sales growth
Over the past four years, the company has seen remarkable growth in sales, with an impressive 38% increase in Compound Annual Growth Rate (CAGR). This rise has been significant, rising from £19 million in 2018 to £70 million in 2022. At the same time, EBITDA has followed a positive trend, rising from £7 million to £20 million in the same period, representing solid growth of 30% in the Compound Annual Growth Rate.
By 2023, this upward trajectory is expected to continue, with optimistic projections indicating a 24% increase in sales, reaching an estimated range between £85 million and £90 million in turnover. This forecast is based on various factors, including the consolidation of existing clients, the acquisition of new clients and the strategic acquisition of new companies.
The company's growth success is based on customer loyalty combined with its expansion strategy. Its strong financial performance supports the company's position as a leading player in its industry and gives rise to a promising future in terms of growth and profitability.
2.2 Growth by geographical areas
Over the course of 2022, the company's global sales experienced impressive growth, increasing from 50,661 million to 70,703 million, representing an increase of 40%. This significant growth is also reflected in sales by region.
In the United Kingdom, sales went from 22,375 million to 23,643 million, showing positive growth. However, the greatest increase is seen in the United States, where sales increased from 12,588 million to 31,088 million, marking a notable growth of 146% compared to the previous year. On the other hand, in the rest of the world, which includes markets such as Mexico, Croatia and Johannesburg, sales remained relatively stable, going from 15,648 million to 15,972 million.
Percentage of sales by region in 2022
2.3 Main metrics 2022
In 2022, the company saw impressive growth in sales, increasing by 40% compared to the previous year. This significant increase took sales from £50 million in 2021 to £70 million in 2022, demonstrating a positive trend in the company's commercial performance.
At the same time, EBITDA reached £20 million, representing a growth of 32% compared to the previous year. This indicator reflects the company's solid operating profitability during the period in question.
However, despite the growth in revenue and EBITDA, the adjusted EBITDA margin decreased slightly from 31% in 2021 to 29% in 2022. This decrease is primarily attributed to increased operating costs, indicating that the company faced additional pressures in terms of profitability.
Despite this slight decline in adjusted EBITDA margin, the company's EBIT saw notable growth of 30% compared to the previous year, reaching £16 million in 2022, up from £12 million in 2021. This increase in EBIT highlights the company's ability to generate solid profits despite cost challenges.
In summary, the year 2022 witnessed significant growth in sales and profitability for the company, although it faced pressure in terms of margins due to increasing operating costs. Despite these challenges, the company managed to increase its EBIT and maintain a strong financial position, suggesting positive performance and a solid foundation for future growth.
Sales growth of 40%, going from £50 MM in 2021 to £70 MM in 2022
EBITDA of £20 MM, a growth of 32% compared to 2021
Adjusted EBITDA margin of 29%, 2 points lower compared to the 2021 adjusted margin of 31%, due to increased costs.
EBIT of £16 MM, 30% higher than the 2021 EBIT of £12 MM
3. Clients
Elixirr is a company that has established a solid presence in the market, having a diversified portfolio of more than 200 renowned clients in various sectors. These clients include corporate giants such as Bank of America, Bloomberg, Tesla, Louis Vuitton, Burger King and American Airlines, among others. This extensive customer base demonstrates the trust and reputation that the company has managed to build in the market.
The company operates in a variety of sectors, including the banking sector, payment services companies, luxury companies, consumer, as well as cloud services and cybersecurity companies. This sector diversification allows Elixirr to take advantage of opportunities in different industries and mitigate risks associated with concentration in a single sector.
A highlight of Elixirr is its ability to retain and grow its customer relationships. In fiscal 2022, 72% of customers were repeat customers, reflecting strong customer loyalty to the company. Additionally, Elixirr has seen a 21% growth in the number of gold customers – those with revenues over £1 million – demonstrating its ability to expand its high-value customer base.
The company focuses on building long-term relationships with its clients, based on trust, collaboration and delivering value. This strategy focuses on understanding each client's specific needs and challenges, and providing customized solutions that drive business success. Elixirr seeks to establish deep and meaningful relationships with its clients, both at an industry and geographic level, allowing them to offer a tailored, high-quality service in all areas in which they operate.
The company currently has more than 200 clients
It operates in the banking sector, payment services companies, companies in the luxury sector, consumer and cloud services and cybersecurity companies.
The company has strong customer retention rates; in fiscal 2022, 72% of its customers were repeat customers.
The number of customers they call gold (>£1m revenue) grew by 21% in FY2022
4. Acquisitions
Elixirr has expanded its market presence through a series of strategic acquisitions in recent years, cementing its position as an emerging force in the world of strategy consulting and business transformation.
One of the most recent and significant acquisitions was the purchase of the American company IOLAP, specialized in big data consulting and advanced analysis, including artificial intelligence. This acquisition not only improved Elixirr's penetration in the US market but also had a positive impact on its financial results. The IOLAP integration increased Elixirr's sales by an impressive 28% and raised the EBITDA margin from 19% to 25%.
The Big Data sector is a constantly growing area, with forecasts for an increase of 32% annually through 2026. This strategic acquisition positions Elixirr to capitalize on these growth opportunities and strengthen its presence in an expanding market.
The IOLAP acquisition was made for a total of $40 million, representing a valuation of 9 times the company's EBITDA in 2021. However, taking into account the projected future profits for 2023, which generate an EBITDA of £6 to £7 million, the acquisition multiple is reduced to 6 times EBITDA.
This acquisition strategy has also extended to other areas, such as the purchase of Retearn, a UK-based consulting and transformation company. The acquisition of Retearn, valued at around 7 times EBITDA, has further strengthened Elixirr's position in the UK market and expanded its service offering to help companies reduce costs, manage risks and improve supplier performance .
In summary, these strategic acquisitions demonstrate Elixirr's commitment to growth and expansion, as well as its ability to capitalize on market opportunities and strengthen its service offering to meet the changing needs of its customers.
5. Industry
The global digital transformation market has seen explosive growth in recent years, and this growth is expected to continue in the coming years. According to estimates, the market size has reached $730 billion in 2022, and is projected to grow at a CAGR of 22% to 26% between 2023 and 2030, surpassing $3.5 trillion.
This market growth is driven by the increasing adoption of cutting-edge technologies such as cloud services, big data and artificial intelligence (AI). These technologies are transforming the way companies operate and offer their products and services, driving demand for digital transformation solutions.
In terms of company size, the large enterprise segment has dominated the market, accounting for 58% of revenue in 2022. This is because large companies typically have more resources to invest in technology and are more willing to adopt digital transformation solutions.
In terms of solution type, the analytics segment has accounted for the largest market share, at 35% in 2022. This is due to the growing demand to integrate large volumes of business information to make informed strategic decisions.
In terms of usage, the BFSI (Banking, Financial, Services and Insurance) segment has dominated the market, accounting for more than 28.3% of revenue in 2022. This is because banks and other financial institutions are increasingly more focused on delivering an enhanced experience to their customers as products and services within the industry are becoming commoditized.
North America has dominated the market, with a 40% share of the industry in 2022. This is due to the high use of the Internet, the rapid adaptation of different forms of online payment and government support for companies in their process of digital transformation.
6. Peers
Elixirr International's competitors may vary depending on the range of services it offers and the specific markets in which it operates. Some of Elixirr's potential competitors in the consulting and business transformation space could include companies like Concentrix, Capgemini or Accenture.
Elixirr has seen outstanding growth compared to other companies due to its Micro Cap status and early stage of development. This position has allowed it to enjoy higher margins on its operations. However, its Return on Invested Capital (ROIC) is affected by the acquisitions made, which places it below other companies in the sector.
Despite these challenges, Elixirr is in a good financial position, with net cash of £15 million. Despite its financial performance, Elixirr's valuation multiples are depressed compared to some similar companies, mainly due to its UK small cap status and economic uncertainties in the European market.
However, this situation has created an attractive opportunity for investors, since the entire sector is trading at low multiples. This means there are investment opportunities in quality companies at low prices. This situation may be favorable for investors looking to take advantage of depressed valuations in the market for potential long-term returns.
7. Management
Stephen Newton, founder and CEO of Elixirr International, is an entrepreneur and executive with extensive experience in the consulting and technology industry.
Prior to founding Elixirr, Newton worked in leadership roles at several consulting and technology companies, where he gained experience in areas such as business strategy, digital transformation and project management. His vision was to create a consulting company that offered differentiated and high value-added services to its clients, focusing on innovation and operational excellence.
Newton founded Elixirr International in 2009 with the goal of providing strategic consulting solutions to companies of all sizes and sectors. Since then, the company has experienced significant growth and established a strong reputation in the global consulting market.
As CEO of Elixirr International, Newton leads the company's business strategy and vision, ensuring Elixirr continues to deliver high-quality, high-value services to its customers. He also plays a key role in managing relationships with key clients and identifying growth and expansion opportunities for the company.
Stephen Newton, founder and chief executive of Elixirr International, owns a 28% stake in the company's shares, valued at £69 million. This significant share ownership gives him notable influence and commitment to the strategic direction of the company. By holding a significant stake in the stock, Newton is closely aligned with the interests of other shareholders, reinforcing his commitment to the success and sustainable growth of Elixirr. This ownership structure reflects a strong focus on creating value for all shareholders and cements Newton's position as an entrepreneurial and visionary leader in the organization.
Newton stands out for his modest approach to his salary compensation. With a base salary of £300,000 a year, his annual remuneration is supplemented by bonuses, totaling salary approximately £1.4 million before tax. After tax deduction, this amount is reduced to £900,000.
Importantly, Newton owns more than 40 times his salary in company stock, demonstrating his clear commitment and alignment to Elixirr's growth and success. This significant equity investment underscores his dedication to driving value and profitability for all shareholders, cementing his position as a committed and visionary leader at the company.
8. Growth forecasts
8.1 Forecasts for 2023
For fiscal 2023, Elixirr projects significant growth in its revenue and profits. Sales are expected to reach between £85 and £90 million, representing a 25% increase on the previous year, while EBITDA is forecast to reach £30 million, an increase of 34%.
These projections point to an estimated profit of around £20 million for the next financial year. In terms of valuation, the company would be at a multiple of around 12 times earnings per share (PER) and 7 times EBITDA from projected future earnings for 2023.
The acquisition of IOLAP in 2022, which generated revenue of $23 million (£15 million), will contribute to Elixirr's revenues in 2023, further consolidating its market position and supporting its continued growth trajectory.
FY 2023 between £85 - 90 million in SALES and £30 million EBITDA
25% growth in sales and 34% in EBITDA
These numbers should translate into about £20 million profit
The company would be about 12x PER and 7x EBITDA from future profits in 2023
The acquisition of IOLAP in 2022 generates a turnover of $23 MM (£15 MM) and part of that turnover will be reflected in 2023
8.2 Long-term forecasts for 2028
Elixirr has an ambitious and clearly defined long-term vision, setting strong strategic objectives by 2028. The company's main objective is to achieve an enterprise value (EV) of £1 billion, which would represent substantial growth compared to its current capitalization. This objective is equivalent to multiplying the company's current capitalization by 4 times.
To achieve this goal, Elixirr plans to maintain constant organic growth of 25% annually until 2028. This means that the company aims to double its size every three years in terms of enterprise value. Additionally, it is expected to maintain a strong EBITDA margin of 29%, which would ensure the company's profitability and financial stability as it continues to expand.
In terms of specific financial results, it is projected to achieve EBITDA of £77 million by 2028. This target is based on a valuation of the company at 13 times EBITDA, which implies significant growth compared to the current EBITDA of £30 million.
To achieve these ambitious goals, Elixirr is expected to maintain annual organic growth of 20%, building on a current EBITDA of £30 million over a five-year period. This would mean achieving EBITDA of £75 million in that time, which would represent significant progress towards the ultimate target of £77 million by 2028. In addition to organic growth, the company is also considering making strategic acquisitions along the way, which could accelerate further its growth and help it exceed financial performance expectations set for the future.
Target £1 billion EV (enterprise value) and grow at 25% organic by 2028
An EV of £1 billion is equivalent to multiplying the current capitalization by 4x.
Their plans are to maintain the EBITDA margin at 29%
It is expected to reach an EBITDA of £77MM (valued at 13x EBITDA we obtain 1 billion capitalization)
This could be achieved by growing organically at 20% starting from a current EBITDA of £30MM in 5 years, we get £75MM of EBITDA, plus some acquisitions along the way, we could surpass that £75MM EBITDA in less than 5 years.
9. Four strategic pillars of growth
Elixirr has established four fundamental strategic pillars to drive its growth and expansion in the market:
Maintain existing partners: This strategy focuses on cultivating strong relationships with the company's current partners. Recognizing the importance of these partnerships, Elixirr seeks to not only maintain its existing partners, but also foster a growth network, where current partners can attract new partners, thus creating a virtuous cycle of expansion.
Promote partners from within: Elixirr is committed to the development and internal promotion of talent. The company strives to cultivate a culture that drives people to reach their full potential, providing them with opportunities to advance within the organization. This is reflected in the practice of promoting talented employees to leadership roles, such as heads of divisions or departments led by the CEO, which not only strengthens employee engagement and loyalty but also drives operational excellence.
Hire new partners: Recognizing the importance of talent in business success, Elixirr focuses on attracting and retaining high-level talent in the company. This strategic hiring strategy allows the company to access new skills and knowledge, driving innovation and growth in new industries and geographies.
Acquire new businesses: Strategic acquisitions are an integral part of Elixirr's growth strategy. The company seeks to diversify its service portfolio and expand its geographic presence by acquiring new businesses. These acquisitions not only add new capabilities and services to Elixirr's business, but also allow it to position itself in new regions, thereby expanding its reach and market opportunities.
Together, these four strategic pillars constitute the solid foundation on which Elixirr builds its long-term business growth and development strategy, thus ensuring its position as a leader in the strategic consulting market.
10. Competitive advantages
In an increasingly competitive and dynamic business market, building and strengthening competitive advantages, commonly known as "MOAT", are critical to the long-term success and sustainability of a company. These advantages represent barriers that protect and differentiate the company from its competitors, allowing it to maintain its position in the market and generate value for its shareholders consistently. In this context, we will analyze Elixirr's key competitive advantages, highlighting how these strategic strengths contribute to its distinctive position in the industry and its ability to generate superior returns over time.
Specialization and experience: One of the most notable advantages of Elixirr is its deep specialization and experience in the development and execution of complex projects. The company has a highly qualified team of engineers and strategic consultants who have deep knowledge in various areas of business and technology. This specialization ensures that Elixirr is equipped with the right resources and skills to address its clients' most demanding challenges and deliver innovative and effective solutions.
Focus on Recurrence: Elixirr is distinguished by its focus on creating long-term relationships with its clients. The company integrates the experience acquired with previous clients into new projects, allowing it to offer more personalized solutions adapted to the specific needs of each client. This ability to capitalize on recurrence not only fosters customer loyalty, but also drives organic, sustainable growth over time.
Growth Platform: It has developed a solid growth platform that allows it to strategically expand into new markets, industries and geographies. The company is committed to constantly seeking opportunities for growth and diversification, whether through the introduction of new services, the acquisition of new companies or geographic expansion. This growth platform gives Elixirr a significant competitive advantage by allowing it to quickly adapt to changing market conditions and take advantage of emerging opportunities.
Efficiency and Low Costs: Its focus on operational efficiency and cost optimization stands out. The company has implemented advanced processes and technologies that allow it to offer high quality services at competitive prices. Additionally, the company benefits from an agile and flexible cost structure, allowing it to quickly adapt to market needs and maintain healthy margins. This efficiency and focus on low costs gives Elixirr a significant competitive advantage by delivering exceptional value to its customers while maximizing its profitability.
11. Risks
The company faces a series of challenges and risks that may have a significant impact on its performance and financial results.
Demand for consulting services may be subject to fluctuations due to ongoing macroeconomic conditions, which may influence companies' availability of financial resources to invest in consulting projects.
In a highly competitive environment, Elixirr faces competition from other consulting firms offering similar services, highlighting the importance of differentiating through quality and innovation.
Customer retention is critical to the company's continued success and is highly dependent on the relationship and reputation Elixirr has established by consistently providing high-quality services. Losing customer relationships can be detrimental and requires constant effort to maintain and strengthen these connections.
Recruiting and retaining qualified personnel is critical to the company's success, as the company's performance depends largely on the experience and skills of its team. The risk of engineers fleeing once they are trained and experienced is a constant concern.
Mergers and acquisitions can present risks, such as poor integration or acquisition, which could negatively affect the company's operation and reputation.
Labor unproductivity can be a problem if the company experiences a decrease in the number of future projects, which could lead to underutilization of resources and affect profitability.
Geopolitical conflicts, such as the conflict between Russia and Ukraine and the resulting sanctions, can have a negative impact on the consulting business, either through the disruption of existing projects or uncertainty in the affected markets.
In short, Elixirr faces a number of risks inherent to its industry and the global economic environment. However, the company is well positioned to mitigate these risks through a solid strategy, a focus on quality and innovation, as well as proactive management of customer relationships and human talent. Despite the challenges, Elixirr has the ability to adapt and respond effectively to market changes, allowing it to maintain its competitive position and pursue long-term growth opportunities.
12. Valuation
To value the company we are going to assume three scenarios, to estimate the different future situations that could arise.
1- Conservative
2- Optimistic
3- Pessimistic
To estimate the different future situations that could arise.
The company has grown at 70% in recent years, and in the last year at 40%, but in no scenario will I put growth above 25%, assuming that it will be difficult to maintain such high levels of growth over time.
The company's historical average valuation is around 19x FCF and 14x EV/EBITDA (Earnings are more depressed by acquisitions).
It is currently valued at 14x FCF and 9x EV/EBITDA, multiples that are more depressed by the current crisis and the conflict in Ukraine, directly affecting small and micro technology caps in Europe.
The market cap is £240 million at a price of £5.30 per share, with 45 million shares.
12.1 Conservative scenario
We assume a growth in sales of 25% for the first year and 15% for the following years.
Operating margin (EBIT) of 25%
20% tax rate
Valuation multiples of 20x FCF and 14x EV/EBITDA
Current trading price of £5.30 per share.
Returns would be around 33% per year over five years. *
Target price could be around £11 over three years and £18 over five years .
12.2 Optimistic scenario
23% growth with M&A
We maintain operating margins of 30%
20% tax rate
Multiple expansion 24x FCF and 18x EV/EBITDA
Current prices of £5.30 per share.
Estimated return in this scenario is 43% over five years. *
Target price would be around £16 over three years and around £30 over five years.
It is practically multiply by 6 times the initial investment.
12.3 Pessimistic scenario
Growth slows to 10%
Compress margins to 20%
20% tax rate
14x FCF and 9x EV/EBITDA
Even in a pessimistic scenario the situation is still good.
Current trading prices of £5.30 per share.
Estimated return around 12% per year over five years. *
Target price could be around £6 over three years and £9 over five years.
Conclusion
In general terms, business transformation is an endless journey, fueled by generational changes and technological advances that define our era. This dynamic process drives companies to remain constantly evolving, always aware of the latest trends and prepared to embrace new opportunities for growth and development.
It all sounds great, but in 2023 we have encountered two black swans, the current financial crisis and the Russia ~ Ukraine conflict, which have greatly affected all technology company stocks, especially European companies (something we expect becomes less and less significant). This specific event has modified the behavior of the market, making European companies and small caps less attractive and their consequent stagnation on the stock market.
High interest rates have delayed projects and investment by companies (Elixirr clients), which has affected fear in the stock market. But however, the fundamentals of the company (what really matters) indicate the opposite, the company grows every year at rates of 20% and high margins, and most importantly, good prospects for the sector.
Elexirr is an unknown microcap, for this reason it is little followed and covered by analysts. Furthermore, it is located in a market punished by the press, lately it is common to hear all kinds of comments about the United Kingdom and the problems as a result of Brexit, although it is still an important economic center and one of the most stable when it comes to investing. , for its political stability and economic past.
A final key here is also the low liquidity (low number of shares traded per day) due to size, leaving large funds and investors without options. A small fund would take weeks to acquire a small position in the company, which in turn, in the event of an exit, could be a slow process with its consequent drawbacks. This situation leaves the retail investor with an advantage over large funds and investors.
Elixirr shares are currently cheap. Its low valuation, great growth prospects, in a good sector, aligned management, trading in a stable market, make Elixirr a good purchasing opportunity today.
Disclaimer
This analysis is not a buy or sell recommendation, it is my personal opinion and each person should make their own analysis of the company.