The French market has been buoyed by a recent interest rate cut from the European Central Bank, which has lifted key indices like France's CAC 40. This favorable economic backdrop provides an opportune moment to explore promising small-cap stocks that may have flown under the radar. In this environment, a good stock is often characterized by strong fundamentals and the ability to capitalize on current market conditions. With that in mind, let's look at three small-cap gems in France that show potential for growth.
Top 10 Undiscovered Gems With Strong Fundamentals In France
Name
Debt To Equity
Revenue Growth
Earnings Growth
Health Rating
Caisse Régionale de Crédit Agricole Mutuel Brie Picardie Société coopérative
34.89%
3.23%
3.61%
★★★★★★
EssoF
1.19%
11.14%
41.41%
★★★★★★
Gévelot
0.25%
10.64%
20.33%
★★★★★★
Exacompta Clairefontaine
30.44%
6.92%
31.73%
★★★★★☆
ADLPartner
86.83%
9.59%
11.00%
★★★★★☆
VIEL & Cie société anonyme
72.14%
5.72%
19.86%
★★★★★☆
CFM Indosuez Wealth Management
239.60%
10.01%
13.52%
★★★★★☆
La Forestière Equatoriale
0.00%
-50.76%
49.41%
★★★★★☆
Caisse Régionale de Crédit Agricole Mutuel Alpes Provence Société coopérative
Overview: Axway Software SA is an infrastructure software publisher operating across France, the rest of Europe, the Americas, and the Asia Pacific with a market cap of €688.40 million.
Operations: Axway Software SA generates revenue primarily from four segments: License (€8.46 million), Maintenance (€77.04 million), Subscription (€201.19 million), and Services (Excl. Subscription) (€35.49 million). The company's subscription segment is the largest contributor to its revenue stream.
Axway Software, a small cap in the French tech landscape, has shown significant progress, becoming profitable this year with net income of €2.8 million for the first half of 2024. The company's net debt to equity ratio stands at a satisfactory 19.9%, and its interest payments are well covered by EBIT at 10.1x coverage. With a price-to-earnings ratio of 19.7x below the industry average and high-quality earnings, Axway appears undervalued compared to peers in the software sector.
Overview: Linedata Services S.A. develops, publishes, and distributes financial software across Southern Europe, Northern Europe, North America, and Asia with a market cap of €386.75 million.
Operations: Linedata Services generates revenue primarily through the development, publishing, and distribution of financial software across various regions including Southern Europe, Northern Europe, North America, and Asia. The company has a market capitalization of €386.75 million.
Linedata Services, a small French software firm, has seen its earnings grow by 22% over the past year, surpassing the industry average of 10.6%. The company's EBIT covers interest payments 9.6 times over, indicating strong financial health. Despite a high net debt to equity ratio of 40.3%, Linedata's debt to equity ratio has improved from 82.5% to 77.9% in five years. Recent half-year results showed sales at €89.69 million and net income at €10.55 million, up from €87.47 million and €8.48 million respectively last year.
Overview: Neurones S.A. is an IT services company offering infrastructure, application, and consulting services in France and internationally, with a market cap of €1.03 billion.
Operations: Neurones S.A. generates revenue through its IT infrastructure, application, and consulting services. The company has a market capitalization of €1.03 billion.
Neurones, a small cap IT services firm, reported half-year revenue of €402.43 million, up from €368.69 million last year. Net income slightly dipped to €24.5 million from €25.42 million previously, with earnings per share steady at €1.01 compared to €1.05 a year ago. Over the past five years, their debt-to-equity ratio rose from 0% to 2.8%, while earnings grew 1.8% last year, outpacing the IT industry’s -7%. The company remains free cash flow positive and holds more cash than total debt.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
Companies discussed in this article include ENXTPA:AXW ENXTPA:LIN and ENXTPA:NRO.
