Ascom Holding: A Strategic Turnaround in Industrial Tech with Undervalued Growth Potential

In the rapidly evolving industrial tech sector, companies that combine operational discipline with visionary leadership often emerge as undervalued gems. Ascom Holding AG (SWX: ASCN) exemplifies this dynamic, leveraging strategic transformation, favorable industry tailwinds, and a newly fortified leadership team to position itself for scalable growth. For investors seeking exposure to industrial tech with a compelling risk-reward profile, Ascom's current valuation and execution trajectory warrant closer scrutiny.

Strategic Operational Overhaul: A Foundation for Growth

Ascom's 2025 transformation has already delivered measurable results. Despite a marginal 1.5% decline in H1 2025 revenue to CHF 140.0 million compared to CHF 142.1 million in H1 2024, the company's EBITDA surged to CHF 12.1 million, with a margin of 8.6%-a 1.2 percentage point improvement year-over-year, according to the H1 2025 results. This margin expansion reflects a disciplined approach to cost optimization, including the consolidation of operational regions from eight to three (North, South, and USA & Canada), which has streamlined collaboration and reduced overhead as reported in the same H1 2025 results.

The company's balance sheet further underscores its financial resilience. As of June 30, 2025, Ascom held CHF 29.5 million in cash and equivalents, with an equity ratio of 37.9% (reported in the H1 2025 results). These metrics, combined with a CHF 15.0 million share buyback program, signal management's confidence in the business's long-term prospects.

Industry Tailwinds: AI and IT Spending Fuel Demand

Ascom's core markets-Healthcare and Enterprise communication-are being reshaped by two megatrends: AI-driven automation and surging IT spending. According to the Deloitte outlook, global IT spending is projected to grow by 9.3% in 2025, with data center and software segments expanding at double-digit rates. PwC notes that AI is enabling companies to automate complex tasks and enhance productivity, a trend directly aligned with Ascom's push for cloud-based, software-centric solutions.

The company's focus on converged platforms and SaaS offerings-such as its Staff Safety solution-positions it to capitalize on these trends. By shifting toward recurring revenue models (targeting 30% recurring revenue in the coming years), Ascom is building a more predictable and scalable business, according to a GlobeNewswire release.

Leadership Reinvention: A Track Record of Execution

Ascom's recent leadership changes add another layer of credibility to its turnaround story. Michael Reitermann, the newly appointed Delegate of the Board and interim CEO, brings over 25 years of experience in med-tech and industrial tech, including leadership roles at Siemens Healthineers, as detailed in the Reitermann appointment. His tenure at Siemens, where he oversaw digital transformation and operational efficiency initiatives, mirrors Ascom's current strategic priorities.

Equally significant is Laurent Dubois's appointment as Board Chairman. Dubois's background in consulting (McKinsey & Co.) and industrial tech leadership (GE Healthcare, ADB Safegate) provides a strategic lens for navigating complex markets, as noted in the Reitermann appointment. Together, Reitermann and Dubois form a leadership duo with deep expertise in scaling technology-driven businesses-a critical asset as Ascom targets growth in the U.S. and Canadian markets.

Valuation Discount: A Compelling Entry Point

Ascom's valuation metrics suggest it is significantly undervalued relative to peers. The company trades at a forward P/E of 13.43 and an EV/EBITDA of 6.77, according to StockAnalysis metrics, starkly contrasting with Comet Holding AG's 56.5x P/E and 27.2x EV/EBITDA as shown in Comet's valuation. These disparities highlight Ascom's discount to industry benchmarks, particularly given its stronger operational performance and clearer path to margin expansion.

The company's enterprise value of CHF 104.30 million also appears misaligned with its growth trajectory. With a share buyback program and a deleveraged balance sheet, Ascom has the financial flexibility to reward shareholders while investing in high-margin cloud solutions (see StockAnalysis metrics for the underlying figures).

Conclusion: A Catalyst-Driven Opportunity

Ascom Holding's strategic transformation, bolstered by operational rigor, industry tailwinds, and seasoned leadership, creates a compelling case for a multiple expansion. The company's focus on cloud-based platforms, recurring revenue, and geographic expansion aligns with macroeconomic trends, while its valuation discount offers a margin of safety for long-term investors. As AI and IT spending continue to reshape industrial tech, Ascom is well-positioned to emerge as a hidden gem in a sector ripe for disruption.