October 26th, 2020 | 10:17 CET
Bechtle, PayPal, wallstreet:online: Which digitisation winner has potential?
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"[...] The mere fact that we have to write off around EUR 5 million shows that mistakes were made. We have to admit this quite openly to ourselves. [...]" André Kolbinger, CEO, Smartbroker Holding AG
Bechtle makes authorities digital
The figures show that Bechtle is a pandemic winner. In the second quarter, the Company even managed to grow. The public sector is a primary sector for the IT system house segment. There is an excellent need for digitalisation here. The pandemic has led to measures that were on hold for years now being implemented. The best example is the health authorities, which are to be digitised. From 2021, the government will make billions available for this purpose.
Bechtle is particularly strong in the German-speaking countries and has been growing organically for years. The Company is valued at just over EUR 7 billion and can look back on a long upward trend on the stock exchange. On a one-year horizon, the share price increased by a hefty 63%. Recently, however, the value has weakened somewhat. Given the unstoppable digitalisation trend and many established business relationships, Bechtle is likely to continue its success story. Public authorities, in particular, could drive growth.
PayPal: Expensive despite crypto-fantasy
The payment provider PayPal has always been digital. When broadband Internet was not available nationwide in Germany, and the network was new territory for many people, PayPal already launched its payment service. PayPal has perfected the principle of paying with just a few clicks. Also, on the smartphone, payment processes succeed at lightning speed - thanks to the fingerprint sensor.
Recently, PayPal announced that it would offer cryptocurrencies in the future. Millions of PayPal customers, who had little to do so far with Bitcoin and Co. might be interested in the topic. If the entry into the crypto world succeeds just as smoothly thanks to PayPal as the entry into mobile payment many years ago, the US payment service provider should hit a nerve with its crypto offer.
PayPal is already growing rapidly and is also expanding into new markets with its payment solutions. Also, there is a boost from Corona: Ordering online or paying contactless with your smartphone is simply the trend and also pushes the PayPal share price. In the past twelve months, the value has increased by almost 100%. There is little sign of weakness recently, but the valuation is already ambitious.
wallstreet:online: Portal business plus promising brokerage
With a valuation of around EUR 150 million, the wallstreet:online share is small midcap. But the company has it all. Known for years as the point of contact for private investors, the media company has been buying more and more around finance and the stock exchange.
wallstreet:online not only provides discussion forums but also stock exchange news and offers a wide range of media services. The recently launched brokerage activities show it to be a sound distribution channel. The broker division of wallstreet:online is growing faster than expected and is expanding the Company's business. Uncomplicated stock trading at favourable conditions seems to be in demand, especially during the pandemic.
Analysts see around 30% price potential
The analyst firm AlsterResearch has a similar view. The experts see wallstreet:online as a growth-strong enterprise on a solid foundation and call out the price target of EUR 14.10 - that is approximately 30% over the current course. The analysts emphasise that the broker business in some parts exceeds the offer of the competition of other neo-brokers and therefore has good chances to be successful in the market. For wallstreet:online, the classic portal business is reliable, firmly positioned in the market, and has shown a positive development even during the peak phase of the pandemic.
The winners of digitisation can be found above all in niche markets. While PayPal has long since outgrown its niche existence, German titles such as Bechtle or wallstreet:online can score points. The latter Company, in particular, looks promising with its young brokerage business and numerous proprietary sales channels.
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