Scout24 SE: Does Its Stock Surge Reflect Strong Fundamentals?

Scout24 SE (ETR:G24) has emerged as a standout performer in the German stock market, with its shares soaring +51.15% over the past year, outpacing both the German market and its Interactive Media and Services sector. Investors are now asking: Is this stock’s meteoric rise justified by the company’s underlying fundamentals, or is it a bubble waiting to burst? Let’s dissect the data.

Revenue Growth: A Key Driver

Scout24’s revenue has been on a steady upward trajectory. In 2024, revenue hit €588.80 million, a +10.7% increase from 2023. This growth was fueled by its core business—digital agent memberships and private property subscriptions—as well as strategic acquisitions like bulwiengesa AG (commercial real estate data) and IMMOunited (Austrian real estate listings). These moves expanded its ecosystem, driving recurring revenue streams.

The company’s gross margin of 75.72% (trailing twelve months) underscores its ability to monetize efficiently. Even as net income dipped -9.3% in 2024 due to higher operational costs, adjusted EPS rose 15% to €2.90, indicating that non-operating factors (e.g., M&A expenses) were temporary drags.

Financial Health: Strong Balance Sheet, Conservative Leverage

Scout24’s debt-to-equity ratio of 13.2% is a stark improvement from its 2019–2020 peak of 78.9%, reflecting disciplined financial management. With €57.1 million in cash and a 135.5% operating cash flow coverage ratio, the company is well-positioned to service its €189.6 million in total debt. Its interest coverage ratio of 130.3x further signals minimal risk of default.

The €150 million share buyback completed in September 2024 also bolsters investor confidence by reducing shares outstanding, thereby lifting EPS. Combined with a +32% dividend hike to €1.32 per share (proposed for 2025), these actions suggest management is prioritizing shareholder returns while maintaining financial flexibility.

Strategic Moves: Acquisitions and Leadership Continuity

Scout24’s acquisition strategy has been pivotal. The Immounited deal in early 2025 expanded its footprint in Austria, while bulwiengesa AG strengthened its B2B offerings in commercial real estate. These moves align with its interconnectivity strategy, which aims to create a cohesive platform linking buyers, sellers, and agents.

The leadership transition to CEO Ralf Weitz in March 2025 has been seamless, maintaining focus on growth and innovation. The company’s ESG progress—including a 56% reduction in CO₂ emissions since 2018 and improved gender diversity (41% women in leadership roles)—adds long-term credibility.

2025 Outlook: Growth and Margin Expansion

Management has reaffirmed ambitious targets: 12–14% revenue growth in 2025 (including ~2% from acquisitions), and ordinary operating EBITDA margin expansion of up to 50 basis points. Analysts project earnings growth of 17.61% annually, supported by its dominant position in Germany’s real estate tech space.

Risks on the Horizon

• Market Concentration: Over 80% of revenue comes from Germany, leaving it vulnerable to local economic downturns or regulatory changes.
• Margin Pressures: Rising operational costs (e.g., tech investments) could test margins further.
• Competitor Threats: Firms like Immowelt or international entrants could erode market share.

Conclusion: Fundamentals Justify the Surge—With Caveats

The data overwhelmingly supports Scout24’s stock performance being tied to its fundamentals. Key positives include:
- Revenue resilience: Double-digit growth for four consecutive years.
- Margin strength: Gross margins near 76% and a 27.5% net profit margin.
- Debt discipline: A conservative leverage ratio and strong interest coverage.
- Strategic execution: Acquisitions that diversify revenue and improve ESG metrics.

While net income dipped in 2024, this was offset by adjusted EPS growth and the one-time costs of integration. The proposed dividend hike and buybacks further validate confidence in cash flow.

However, investors must remain vigilant. Scout24’s reliance on the German real estate market and execution risks with new acquisitions could pose challenges. That said, with €223.2 million in free cash flow (2024) and a 13.06% projected EBITDA growth in 2025, Scout24 appears poised to sustain its momentum. For now, its fundamentals justify the stock’s performance—but close monitoring of these risks is essential.

In a sector where real estate tech is increasingly digital, Scout24’s ecosystem-first approach and financial discipline make it a compelling play for investors seeking growth in Europe’s housing market.