Should You Consider Buying 2G Energy AG (ETR:2GB) Now?

2G Energy AG (ETR:2GB) has been making waves in the decentralized energy supply market, with a strong focus on hydrogen and other weak gases. As the global demand for clean energy sources continues to grow, the company's strategic shift towards these alternative energy sources has positioned it well for long-term growth. But is now the right time to invest in 2G Energy AG? Let's take a closer look at the company's financial performance, growth prospects, and valuation to help you make an informed decision.



Financial Performance and Growth Prospects

2G Energy AG has demonstrated impressive financial performance in recent years. In 2023, the company's revenue increased by 16.77% to EUR 365.27 million, while earnings grew by 9.54% to EUR 17.95 million. This strong growth can be attributed to the company's expanding international presence, particularly in the US market, and its focus on innovative energy solutions.

The company's robust business model has continued to thrive, with sales revenues and total output seeing double-digit increases in Q3 2024. Additionally, 2G Energy AG achieved a record order backlog of over EUR 220 million by August 2024, driven by international demand and new EU wastewater directives. These factors indicate a strong pipeline of future projects, which bodes well for the company's growth prospects.

Valuation and Investment Considerations

With a market cap of EUR 446.71 million and an enterprise value of EUR 445.25 million as of January 17, 2025, 2G Energy AG appears to be undervalued, given its strong fundamentals and growth prospects. The company's enterprise value to sales ratio is at 0.93 for the current period, suggesting that it may be an attractive investment opportunity.

However, it is essential to consider the company's valuation in the context of its cash flows. While 2G Energy AG's fundamentals are strong, its valuation is particularly high given the cash flows generated by its activity. This may be a concern for investors seeking a high dividend yield, as the company pays a small or no dividend to shareholders.



Analysts' Opinions and Recommendations

Analysts covering 2G Energy AG mostly recommend stock overweighting or purchase, with an average target price set above current prices. This suggests that there is significant appreciation potential for the stock. However, it is essential to note that the sales outlook for the group was lowered in the last twelve months, and EPS estimates made by Standard & Poor's analysts have been revised downwards for the last four months. Additionally, the average price target of analysts has been significantly revised downwards over the last four months.

In conclusion, 2G Energy AG's focus on hydrogen and other weak gases, combined with its strong financial performance and growth prospects, makes it an attractive investment opportunity. However, investors should carefully consider the company's valuation and cash flows, as well as the opinions and recommendations of analysts, before making a decision. As always, it is essential to conduct thorough research and consult with a financial advisor before investing in any company.