GFT: IT and software specialist acquires company in Colombia

Last Updated: 14. Februar 2024By

The topic of artificial intelligence (AI) is currently on everyone’s lips. The chip specialist Nvidia continues to make waves on the stock market. The British chip designer Arm also benefited massively from the AI hype in recent days. The Arm stock has doubled in value in a very short time and has reached completely absurd valuation metrics. An annual turnover of only 3 billion USD is matched by a market value of over 120 billion USD.

Valuations in AI stocks are now often very ambitious and sometimes absurd. However, there are also AI beneficiaries that are still very reasonably priced. This includes the German IT and software specialist GFT.

Recently, the digitalization specialist announced a groundbreaking acquisition in Colombia. As a result, the GFT stock rose by double digits. You can find out more about the latest acquisition after a brief company portrait:

Digitalization specialist and AI beneficiary 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 services for 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 (networked factories). GFT currently employs around 8,800 full-time employees, and the GFT stock has been listed on the Frankfurt Stock Exchange since 1999. Since December 2021, the stock has been listed in the small cap index SDAX.

Acquisition in Colombia makes GFT even more interesting Let’s take a look at the acquisition: IT service provider GFT is acquiring Sophos Solutions from Colombia for the equivalent of 87 million euros. The purchase is to be financed through the extension of existing credit lines and the company’s own funds. With the acquisition, the company significantly strengthens its market position.

Sophos is a specialist in the modernization of core banking systems and cloud computing. In the 2022 financial year, Sophos generated annual sales of 60 million euros and a pre-tax profit of 9 million euros. This means that Sophos is more profitable than GFT with a pre-tax margin of 15%. The company’s operating profit margin (EBIT margin) was last at 8.8%. Therefore, the acquisition increases GFT’s margin. The number of employees at GFT will increase by almost 20% due to the acquisition.

After the announcement of the Sophos acquisition, the GFT stock rose significantly but later gave back some of its gains. The price targets of my analyst colleagues currently range up to 57 euros. This would mean a profit potential of over 80% based on the current price level. According to my analysis, the GFT stock still has room for growth.