Making Science Group, S.A. provides marketing and technology services in the areas of digital marketing, business analytics, electronic commerce, and cloud worldwide. The company offers Nilo, a cloud-based e-commerce platform that is used to optimize the design, development, and structure of the page for visibility in search engines; Gauss AI, a product for solutions applied to marketing, sales, and loyalty needs; and Shoptize, a Spanish comparison shopping service. The company was incorporated in 2001 and is based in Madrid, Spain.

Spain

Making Science Group, S.A.

Communication Services

The company does not pay dividends at all, or it pays them sporadically. There have only been a few years with dividend payments in the past ten years. 

MAKS.MC reported revenue of EUR 248mn in the last 12 months, down 16% from FY23. At the same time, the dynamics of cash flow, as measured by free cash flow (FCF), were drastically different. 

The stock's performance has been mixed in the past six months, with growth following a decline. There is no clear price trend compared to its global peers from the same sector and industry (as shown above). The stock has outperformed this peer group by 13ppts over past six months and grown 4ppts slower in the past month. This is largely true for peers from the same country and sector. With respect to the stock's valuation against its peers, its overall price performance is neutral.

The ratio of return on invested capital (RoIC) to the weighted average cost of capital (WACC) has been -1.1 in the past several years. This ratio implies a fragile shareholder value creation. 

The institutional, legal, and compliance risks associated with the company's country are minimal. In combination with stringent business standards, shareholder rights are very highly protected.

MAKS.MC has very poor trading liquidity. It will take considerable time for the average private investor to sell a common position under normal market conditions. Liquidity is very unstable and becomes extremely unfavourable on the days with the lowest activity. However, under highly turbulent market conditions, the trading volume tends to improve significantly. Another factor to consider is the substantial number of days with zero trading volumes, i.e., without any ability to sell a position. The stock has a tiny market capitalisation, which usually makes its trading liquidity erratic and unpredictable. 

No other major risks have been identified.

The risk of default is high. Among the negative credit factors, we point to weak positions in its industry, bleak profitability, negligible return on capital, poor working capital management, inadequate interest coverage, and an unfavourable capital structure. We note resilient historical revenue growth and low margin volatility, among the positive credit factors. 

In highly turbulent market conditions, MAKS.MC is not overly volatile. In other words, the stock will fall less than the index in times of extreme market volatility or shocking company news. Standalone, the worst-day losses (less than 1% of the time) will likely be low. 

In normal market circumstances, MAKS.MC is as volatile as an index. Put differently, without outstanding market volatility or shocking company news, the stock's price will move with the index. The stock's losses on its worst days (less than 1-5% of the time) will range from low to mild. 

From both historical and forecast perspectives, the stock is considerably overpriced compared to similar stocks. In particular, the stock is 'expensive' on EV/EBITDA, overvalued on P/FC. 

Making Science Group, S.A.

€ 9.1

3

Making Science Group, S.A.

€ 9.1

3

Risk factor

Profitability factor

Risk / Profitability

Risk factor

Profitability factor

€ 9.1

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