Virtualware: EERP Initiates Coverage with a Buy Rating and a Target of 7.42 Euros
European research firm EERP has started covering the extended reality specialist with a positive outlook (buy) and a target price of 7.42 euros, indicating an upside potential of about 33%. This initiation comes as the company guides a 30% revenue growth by 2026 and reports significantly increased gross margins following its transition to a subscription model.
EERP, through Simon Power (head of research), has initiated coverage on Virtualware with a price target of 7.42 euros, based on a 7x multiple of the estimated 2026 revenues, adjusted by a 20% discount to account for the limited liquidity of the stock on Euronext Growth Paris. This methodology aligns the target price with the multiples observed among peers in the extended reality sector.
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The report highlights operational improvements since the 2021 shift towards a recurring VRaaS (Virtual Reality as a Service) model, further consolidated by the acquisition of Simumatik in 2024. Virtualware now reports an entry-level gross margin in the 90% range, indicative of stronger recurring visibility and improved unit profitability of the services offered. The company serves sectors such as energy, defense, healthcare, education, and manufacturing.
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