Evotec Earnings: Challenging 2023 Prompts Focus on Profitability, 2024 Guidance on Track for Reset

No-moat Evotec’s fourth quarter and full-year 2023 results landed roughly as we expected, and we are maintaining our fair value estimates of EUR 14 per share and $7.60 per share. The firm’s top-line growth was negatively affected by lost productivity due to a cyberattack and softer demand trends from biotechnology customers. Management announced a strategic reprioritization of the business with an emphasis on improving profitability and provided qualitative initial guidance for 2024. After digesting the tough 2023 results and news of the reassessed outlook, investors sent shares tumbling by over 30%.