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In the field of enterprise software, Europe is a bit of a dull plain. Behind the headliners like SAP or Dassault Systèmes, good profiles are relatively rare. But they exist, like the Finnish Qt, which should be pronounced “cute”, i.e. “cute” in English.
Since it must be assumed that the software is crunching the planet, to quote Marc Andreessen, some publishers provide shovels and pickaxes. This is the case of Qt Group, which offers a cross-platform software development environment. The software developer for software development, of sorts, with strong expertise in tools for applications for embedded devices and desktop and mobile environments. The first successful version was released in 1996, before being enriched over twenty-five years both internally and through a few acquisitions. The solution is now described as “all-in-one”, that is to say from the code to the test through the cross-platform adaptability and the design of graphical interfaces. Qt can boast of being present at Google, Adobe, Skype, Bosch, Hyundai, Spotify, Panasonic, Stellantis or NASA.
Qt offers two interesting specificities. First, the company works with industries that are changing as they see their value creation shift from their products to the software and services that come with it. Second, the business model is based on developer licenses and distribution licenses, whose revenue is based on sales volumes of end devices that use Qt technology. In other words, the company’s offering has the potential to capture customers (recurrence) and benefit from their eventual business success (high margins). The small size of the company is balanced by a solid reputation and a loyal open source community, which allows the publisher to stay closer to the needs of its users. Indispensable when you have to come up against competitors of such stature as Microsoft or Google, whose strike force is well established.
At the shareholder level, the company has been somewhat tossed about over the past fifteen years. Nokia bought it from Trolltech in 2008, before parting with it in 2012 from Digia, which listed it on the stock market. Listed in Helsinki, the company enjoyed a remarkable and steady bull run, before being lifted to the skies by the outsized surge of the Covid years. Then to fall heavily. The price went from less than 5 euros in 2016 to nearly 180 euros in October 2021. It has returned to around 46 euros currently. After having very generously appreciated it, the market now seems to assess more severely the very good growth momentum of Qt as of the rest of the technology sector.
But unlike companies that have not demonstrated the beginning of the beginning of a viable model, the Finnish is profitable. The financial performance of the last few years has been solid: in eight years, Qt will have multiplied its turnover by eight, from 20 to 150 million euros and brought its profitability from negative to 15 million euros per year at the cash level. -free flow. From now on, the company is profitable and is neither indebted nor overcapitalized. There is no particular concern that Qt will achieve its profitability objectives because the cost structure is essentially variable.
The file shows a PER (price earning ratio, or ratio between the stock market price and future profits) of around 31 times the results expected in 2023. If the objectives are achieved, this ratio could drop to 22 times at the 2024 horizon. Despite the price plummeting from its highs, Qt remains valued as a high-growth company. In other words, she really has no right to disappoint on this point.
