QS Research · Michael Burry's Scion Capital analyst template · 2006
Evotec SE (EVO)
As of 2026-11-08 · 11/15 boxes filled from SEC filings and market data
Conclusion: WATCH
Conviction low · base case -32% · downside -48% · upside +76%
On section 13's TTM EBITDA base of $48.2M (S1) at today's 7.8x EV/EBITDA (N30), plus lease-adjusted net cash of $31.9M ($222.8M net cash less $190.9M leases; N26/N25/N11), the base value is $1.15/ADS, -32% from $1.69 (N1). A 25% EBITDA decline at the same multiple gives $0.88 (-48%), while adding the €75m Horizon run-rate savings to FY2025 EBITDA (€43.3M + €75m = €118.3M = $131.8M; N17/S30) gives $2.98 (+76%) at 7.8x. The market is not missing a clean bargain: FY2026 guidance is €570-610m revenue and -€105 to -€70m adjusted EBITDA (S5), 9M 2026 operating cash outflow was €155.0m (S29), and FY2025 FCF was -€81.7m (N21), so the current earnings base is deteriorating before Horizon repairs it. I would watch, not short, because a partial Horizon recovery or a takeover/activist outcome can produce enough upside to break a short, while the base case is not yet +30% to justify a long.
Key numbers
- Share price: $1.69
- Market cap: $600.9M
- Latest financial period: FY Dec 2025 to Dec 31, 2025
- Revenue (FY Dec 2025): €788.4M
- EV / EBITDA (FY Dec 2025): 7.8x
- Price / book: 0.66x
The 15 boxes
- ✓ 1. Long-form business notes
Evotec earns almost all its money from fee-for-service and FTE-based research work for pharma and biotech partners — 79% of FY2025 third-party revenues, with milestone payments only 1.2% and royalties not yet material. Revenue rose from €500.9M (FY2020) to €797.0M (FY2024) before slipping to €788.4M (FY2025), while operating income fell from +€48.6M (FY2020) to -€142.5M (FY2024) and -€56.2M (FY2025). Between the FY2021 and FY2025 20-Fs the reported segments changed from EVT Execute/EVT Innovate to Discovery & Preclinical Development/Just–Evotec Biologics, and the strategy shifted from expansion to profitability: the Sandoz sale of the JEB Toulouse site closed December 2025 (USD 350m upfront) and the Horizon programme announced 10 March 2026 targets ~€75m run-rate savings by end-2027.
- ✓ 2. Competitive advantage
The sources describe an integrated discovery/services platform, but the margin and return record shows no durable advantage: operating income has been negative every year since FY2023 (-€47.5M FY2023, -€142.5M FY2024, -€56.2M FY2025) and FY2025 operating cash flow was -€9.2M against €72.5M of capex. Revenue grew from €500.9M (FY2020) to €788.4M (FY2025) but fell slightly from FY2024's €797.0M while gross profit dropped from €175.1M (FY2023) to €114.2M (FY2025), so scale has not converted into pricing power. The moat is asserted, not measured: management calls the platform one 'that cannot be replicated', while its own risk factors flag 43% of 2025 revenue in three customers and price pressure from Asian/Eastern European CROs and AI-driven competitors.
- ✓ 3. 10-Q takeaways
The latest report is Evotec's 6-K interim statement for 9M 2026 (dated 2026-11-05), not a 10-Q. Q3 2026 revenue was €164.9m, essentially flat YoY, while 9M 2026 revenue fell 13.1% to €465.0m; adjusted EBITDA improved sharply in Q3 to -€1.6m but was -€44.3m for 9M. FY2026 guidance is reaffirmed at approximately €570-610m revenue and -€105 to -€70m adjusted EBITDA, with liquidity of €400.9m and no buyback or risk-factor update in the provided sources.
- ✓ 4. Corporate governance
Filled; members read this box.
- ✓ 5. Overview of the prior 3 years of 8-K filings
Filled; members read this box.
- ✓ 6. Other significant filings
Filled; members read this box.
- ✓ 7. Chronology of significant news and events
Filled; members read this box.
- ✓ 8. Comparables valuation interpretation
Filled; members read this box.
- ○ 9. Insider trading interpretation
- ○ 10. Earnings-call notes
- ○ 11. Impression of the shareholder letter
- ○ 12. Scuttlebutt overview
- ✓ 13. Valuation and risk/reward summary
Filled; members read this box.
- ✓ 14. Current price suppression and potential catalysts
Filled; members read this box.
- ✓ 15. Conclusions
The call above.
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