Pyramid AG (ETR:M3BK) Poised for Profitability: A Strategic Shift

Pyramid AG, listed on the Deutsche Börse Xetra under the ticker symbol M3BK, is on the cusp of a significant transformation. The company, which develops and manufactures IT solutions for the retail and hospitality market, is expected to shift from losses to profits in the coming years. This article explores the strategic initiatives driving this shift and the opportunities for the company to close the valuation gap with its peer group.

In 2021, Pyramid AG successfully transitioned from a holding company to an operational entity, acquiring Pyramid Computer and faytech. This strategic move expanded the company's presence in the point-of-sale market and positioned it for growth. The company expects revenue of around €100m in FY22, with an EBIT margin of 9%. For subsequent years, double-digit revenue growth is anticipated, driven by market growth, customer wins, and expansion into new market segments such as travel, mobility, and healthcare.

Pyramid AG's valuation currently lags behind its peer group by 24% based on FY22e EV/EBITDA. However, the company's strategic initiatives and expected growth present an opportunity to close this gap. By leveraging its robust management and enduring business model, Pyramid AG can work towards narrowing this valuation gap and delivering consistent growth for investors.

In conclusion, Pyramid AG (ETR:M3BK) is poised for profitability, driven by strategic acquisitions and expansion into new market segments. The company's expected revenue growth and EBIT margin improvements present an attractive investment opportunity, with the potential to close the valuation gap with its peer group. As Pyramid AG continues to execute its strategic initiatives, investors should keep a close eye on this promising company.