After more than five years of decline, the stock of United Internet has formed a new upward trend and is in the process of completing a very strong long-term bottom formation.

Much indicates that the comeback of the cheaply valued TecDAX stock has begun. From a technical chart perspective, there is considerable upward potential.

United Internet: leading telecommunications and internet service provider If you are not familiar with United Internet, let me first introduce you to the company. The company, based in Montabaur in the Westerwald region, went public in March 1998 during the time of the Neuer Markt and is one of the few companies that survived the bursting of the internet bubble at that time and ultimately emerged stronger from it.

Today, United Internet, whose founder Ralph Dommermuth still holds almost 49% of the shares, is one of the leading telecommunications and internet service providers in Europe. Under the brand 1&1, the group, which has its own fiber optic infrastructure, offers broadband and mobile services for individuals and small to medium-sized businesses.

The portfolio also includes brands such as Web.de and GMX. The subsidiary Ionos, in which United Internet still holds around 64%, was brought to the stock market in February 2023. The group holds 78% of the also listed subsidiary 1&1.

Annual forecast raised While revenue has continuously expanded in recent years, there have been declines in profit from time to time, including in the Corona year 2020 as well as 2022.

For the just-ended year 2023, the company recently expressed optimism. In the first nine months of 2023, the number of paid contracts increased by 730,000 to over 28 million. Due to the positive development at the subsidiary 1&1, management expects an operating profit before interest, taxes and depreciation (EBITDA) for the full year 2023 above the previous year’s value of 1.27 billion euros.

Analysts are forecasting a new record profit for the coming fiscal year. This is countered by a very favorable valuation: Based on earnings estimates for 2025, the price-earnings ratio (P/E ratio) is currently only 10.

Source: www.aktienscreener.com

Strong trend signal suggests further price increases The stock of United Internet has experienced a dramatic decline in recent years. Between January 2018 and July 2023, the TecDAX stock lost almost 80% of its value. However, since the fall, the stock has been shining with new strength and is currently one of the strongest momentum stocks on the German market.

In addition, the stock price is currently in the process of completing a strong long-term bottom formation. If the stock can establish itself above the €23 mark – where the interim high was in January 2023 – it would be a strong trend signal. In this case, the price could quickly advance towards the key €30 mark.