Edison Investment Research Limited : Ergomed (ERGO): What's next after stellar 2020 performance?

Edison Investment Research Limited 
Edison Investment Research Limited: Ergomed (ERGO): What's next after stellar 2020 performance? 
02-Jun-2021 / 08:00 GMT/BST 
=---------------------------------------------------------------------------------------------------------------------- 
 
London, UK, 2 June 2021 
 
Ergomed (ERGO): What's next after stellar 2020 performance? 
Although most of 2020 was challenging for the contract research outsourcing (CRO) sector, for Ergomed it was a 
transformative growth period due to well-balanced pharmacovigilance (PV) and CRO offerings. Ergomed managed to 
withstand global woes caused by the COVID-19 pandemic and delivered another solid year of growth, organically and 
through acquisitions. We believe the company will continue to benefit from a clear strategic focus (oncology, rare 
diseases and pharmacovigilance), order book growth and margin control and strong secular CRO sector growth. Our 
valuation of GBP683m or 1,400p/share is virtually unchanged. 
 
We maintain our estimates and our valuation is virtually unchanged at GBP683m or 1,400p/share derived from our DCF model 
implying an EV/EBITDA multiple of 30.5x based on our FY21 forecasts. We note that Ergomed trades at a premium EV/EBITDA 
(FY21e) of 26.9x compared to the peer average of 20.0x (in line with Medpace). In this report, we analyse the 
sensitivity of our valuation to a set of DCF assumptions (long-term sales growth and profit margins). We find that a 
bull case would correspond to a valuation of 1,950p/share, while a bear case 995p/share. The AGM trading update in June 
2021 and full H121 trading update in July 2021 are the next catalysts. 
Click here to view the full report or here to sign up to receive research as it is published. 
 
All reports published by Edison are available to download free of charge from its website 
www.edisongroup.com 
About Edison: Edison is a leading research and investor relations consultancy, connecting listed companies to the 
widest pool of global investors. By focusing on the volume and quality of investors reached - across institutions, 
family offices, wealth managers and retail investors - Edison can create and gauge intent to purchase, even in the 
darkest pools of capital, and then make introductions via non-deal roadshows, events or virtual meetings. 
Having been the first in-market 17 years ago, Edison now has more than 100 analysts covering every economic sector. 
Headquartered in London, Edison also has offices in New York, Frankfurt, Amsterdam and Tel Aviv and a presence in 
Athens, Johannesburg and Sydney. 
Edison is authorised and regulated by the Financial Conduct Authority. 
Edison is not an adviser or broker-dealer and does not provide investment advice. Edison's reports are not 
solicitations to buy or sell any securities. 
For more information, please contact Edison: 
Dr Jonas Peciulis [phone] [e-mail] 
Dr Sean Conroy  [phone] [e-mail] 
Learn more at www.edisongroup.com and connect with Edison on: 
LinkedIn        https://www.linkedin.com/company/edison-group-/ 
Twitter           www.twitter.com/Edison_Inv_Res 
YouTube       www.youtube.com/edisonitv 
=---------------------------------------------------------------------------------------------------------------------- 
Dissemination of a CORPORATE NEWS, transmitted by EQS Group. 
The issuer is solely responsible for the content of this announcement. 
=---------------------------------------------------------------------------------------------------------------------- 

1203167 02-Jun-2021

 
Image link: 
https://eqs-cockpit.com/cgi-bin/fncls.ssp?fn=show_t_gif&application_id=1203167&application_name=news

(END) Dow Jones Newswires

June 02, 2021 03:00 ET (07:00 GMT)