German digitalization specialist GFT continued its steady growth in the third quarter of the current year despite a still difficult market environment. Before we take a closer look at the latest figures and the updated targets for the full year, let’s take a quick look at GFT’s business model in the „final gong“:

GFT Technologies SE is an IT service provider and software developer for the financial and insurance industry as well as the industrial sector. The company, founded in 1987 and based in Stuttgart, offers consulting and development on various technology topics and software products.

These include topics such as cloud engineering (application of engineering disciplines to cloud computing), artificial intelligence (AI) or industry 4.0 (connected factories). GFT currently employs a total of 8,800 full-time employees.

The latest figures in focus The company achieved revenues of 594.61 million euros in the first nine months of this year. This meant that GFT exceeded the previous year’s figure of 541.91 million euros by 10%. The performance indicators could also be improved compared to the first nine months of 2022. The adjusted operating result (adjusted EBIT) increased by 7% compared to the previous year’s period to 52.14 million euros.

Despite burdens from necessary capacity adjustments, the adjusted EBIT without currency effects even rose by 14%. The adjusted operating margin (adjusted EBIT margin) was 8.8% in the first nine months.

The trend in earnings margin has recently been positive: In the third quarter of 2023, the operating margin increased by almost three percentage points compared to the second quarter of 2023 to 10.3%. This significant improvement is mainly due to an increased utilization rate.

GFT CEO Marika Lulay comments on the developments as follows: „Our customers know that a successful digital transformation is a prerequisite for their long-term success. That’s why they rely on us as a partner. That’s why we were able to grow faster than the market even in the third quarter without impairing our margins.“ Furthermore, she said GFT sees a globally increasing demand for the company’s own AI solutions.

Adjusted forecast for 2023 GFT continues to expect solid revenue and earnings growth for the full year 2023. However, due to increased geopolitical risks and macroeconomic uncertainties, the GFT management has slightly reduced the revenue forecast. Instead of sales of 810 to 820 million euros, sales of 800 to 810 million euros are now expected.

The forecast for the result remains unchanged. For the adjusted operating result (adjusted EBIT), GFT confirmed its growth expectation of 74 to 76 million euros.

Based on the current figures, the forecast for the full year 2023 and the medium-term prospects, the GFT share is currently well valued according to my analysis and therefore at least worth a look.