Unlocking Value in Undervalued Tech Innovators: Why CM.com and Fintel Plc Offer Compelling Growth Plays in a Recovering Europe

Cyrus ColeFriday, Jun 6, 2025 3:09 am ET
4min read

As the European economy emerges from post-pandemic stagnation and geopolitical uncertainty, tech stocks are poised to lead the recovery—particularly those with scalable revenue models, strategic innovation, and undervalued pricing. Among them, CM.com (CMCOM.AS) and Fintel Plc (FNTL.L) stand out as underappreciated growth engines in cloud software and fintech. Both companies deliver robust metrics amid sector volatility, yet their valuations lag behind their potential. Here's why they deserve investor attention—and why time is of the essence.

CM.com: Betting on AI-Driven Conversational Commerce

CM.com, a Dutch cloud software provider, is transitioning from a transactional business to an AI-first platform with its

system, designed to automate compliance, HR, and finance tasks. This shift is paying dividends:
- Revenue/EBITDA Dynamics: Despite a 3% drop in total revenue to €274 million in 2024, Annual Recurring Revenue (ARR) surged 8% to €34.4 million, signaling a strategic pivot toward software-driven growth. EBITDA spiked 63% year-over-year, driven by cost discipline (OPEX down 4%) and higher gross margins.
- AI Traction: HALO has already secured 100 customers, including partnerships with Bamigo and Energie, and its adoption in core departments like Legal and Finance hints at long-term efficiency gains.

Valuation & Risks:
- While CM.com's EV/EBITDA ratio of 86x seems high, it reflects a positive free cash flow (FCF) yield of 7.5% and a runway for AI monetization. The company's refinancing of debt in Q1 2025 also strengthens its liquidity.
- Risks: A negative net income (-€19.8M) and an Altman Z-Score of 0.8 (indicating bankruptcy risk) are red flags. However, its FCF stability and AI traction suggest a turnaround is within reach.

Investment Thesis: CM.com's valuation remains undervalued relative to its AI growth story. Investors who overlook its near-term losses in favor of its recurring revenue trajectory could capitalize as HALO's monetization ramps up.

Fintel Plc: Leveraging Acquisitions to Fuel Fintech Dominance

Fintel, a UK-based fintech leader, has been on a buy-and-build spree, acquiring four firms in 2024 to expand its SaaS offerings. Results are clear:
- Revenue Growth: Core revenue jumped 21.9% to £68.9 million, with SaaS revenue rising 17% to £44.1 million. The Matrix 360 platform (launched in 2025) has already secured six new customers, and its pipeline suggests strong future adoption.
- Balance Sheet Strength: £6.3 million in cash and £50M credit facility headroom provide ample fuel for further M&A or organic growth.

Valuation & Risks:
- Fintel's DCF analysis estimates a fair value of £4.44 per share—41% above its current price of £2.63—based on 10-year cash flow projections and a 2.1% terminal growth rate. Its P/E of 22.9x is reasonable given its SaaS exposure and 14.5% growth in fintech revenue.
- Risks: EBITDA margins dipped 320 basis points due to integration costs, and net debt rose to £23.7M. Yet its leverage ratio of 1.1x remains manageable.

Investment Thesis: Fintel's acquisition strategy and SaaS scalability position it as a leader in fragmented fintech markets. The DCF gap suggests significant upside, especially as Matrix 360's market intelligence software gains traction.

Why Now? The Urgency of Action

Both stocks face headwinds: CM.com's reliance on transactional metrics (messages sent fell 10%) and Fintel's margin pressures. Yet their undervalued DCF multiples and strategic execution make them compelling buys ahead of a European tech rebound.

  • CM.com: A buy for investors willing to bet on AI's long-term ROI. Monitor its Capital Markets Day (May 15) for HALO's roadmap.
    Backtest the performance of CMCOM.AS and FNTL.L when 'buy on the date of CM.com's Capital Markets Day' and 'hold for 30 trading days', from 2020 to 2025.
  • Fintel Plc: A strong buy given its DCF undervaluation and SaaS tailwinds. The dividend yield of 1.25% adds a safety net.

CM Total Revenue

Final Take: The European tech recovery isn't a distant possibility—it's already unfolding. Companies like CM.com and Fintel Plc are positioned to lead, but their valuations won't stay depressed forever. Investors should act swiftly to lock in these growth opportunities before the market catches up.

The European tech sector is ripe for disruption. These two innovators offer a rare blend of growth, undervaluation, and strategic moats. Don't let the volatility distract you—their trajectories are too promising to ignore.