Verbund VER.VI
What does Verbund do?
Verbund is an Austrian energy utility headquartered in Vienna that generates, trades and sells electricity predominantly from renewable sources. Its focus is hydropower along major rivers such as the Danube and the Inn. This is complemented by wind power, photovoltaics and flexible storage solutions, including battery storage. Its activities are organized into the segments Hydro, New Renewables, Sales, Grid and All Other.
Customers range from energy exchanges, traders and other utilities to industrial companies and household and commercial customers. Besides electricity, gas, e-mobility and large-scale photovoltaic installations are also offered. The grid business is a regulated area separated from power generation. In competitive terms, Verbund benefits from a very high share of emission-free generation, flexibly deployable storage power plants and a presence in several European markets, including Germany, France, Romania and Spain.
Score profile
Rank vs. Utilities - Renewable (8 companies). 10 = top of the group, 5 = middle. Calculated from the metrics below, without AI.
Metrics compared with the industry
On profitability and quality, Verbund ranks in the middle in the group Utilities - Renewable (5.6/10). On growth, the company ranks in the bottom fifth in the group Utilities - Renewable (1.9/10). On valuation (higher = cheaper), the stock ranks above average in the group Utilities - Renewable (6.3/10). On financial strength, Verbund ranks in the middle in the group Utilities - Renewable (4.9/10).
| Metric | Stock | Group median | Ranking |
|---|---|---|---|
| Forward P/E | 16.9x | 16.9x | better than 50 % |
| Trailing P/E | 26.1x | 35.2x | better than 75 % |
| PEG ratio | 1.9x | 2.6x | – |
| EV/EBITDA | 13.8x | 15.8x | better than 69 % |
| Price/sales | 3.3x | 3.8x | better than 69 % |
| Price/book | 2.6x | 2.0x | better than 7 % |
| Revenue growth | 6.9% | 16.5% | better than 31 % |
| Earnings growth | -59.3% | 0.0% | better than 6 % |
| Gross margin | 40.5% | 57.0% | better than 19 % |
| Operating margin | 14.8% | 15.7% | better than 44 % |
| Net margin | 12.5% | 6.5% | better than 81 % |
| Return on equity | 9.8% | 4.5% | better than 81 % |
| Debt/equity | 32.8% | 140.2% | better than 81 % |
| Current ratio | 0.8x | 1.1x | better than 6 % |
| Free cash flow yield | 0.0% | -3.1% | better than 58 % |
| Dividend yield | 2.8% | 4.3% | – |
| Payout ratio | 72.3% | 122.5% | – |
| Beta | 0.14 | 0.86 | – |
Valuation: what is Verbund worth?
Two valuation approaches – a discounted cash flow model and a valuation at the industry’s median multiples – give Verbund a model range of 72.40 EUR to 84.44 EUR per share.
14 analysts, average rating “Underperform”, average price target 62.98 EUR (−13.0%).
The full DCF matrix, the reverse DCF (what growth the price implies) and scenarios are part of the Pro analysis.
What the business depends on
- The wholesale electricity price largely determines generation revenue, as a large share of volumes is sold on the market.
- River flow and thus the output of run-of-river plants noticeably influence revenue and earnings.
- Flexible storage and pumped-storage power plants allow earnings from price fluctuations and from system services for grid stability.
Risks
- Falling electricity prices or political intervention such as windfall revenue skimming and price caps can significantly reduce earnings power.
- Drought or other weather-related fluctuations reduce generation from hydro, wind and solar power and make planning more difficult.
- Regulatory requirements in the grid business as well as high investment in expansion and storage carry return and cost risks.
What to look for with Verbund
Adjusted operating earnings (EBITDA) relative to debt is informative because capital-intensive power plants and grids require high investment and depend strongly on electricity prices.