ATO - Atos share price has collapsed: time to collect?
2024-03-26 07:59:42 ET
Atos (EPS: ATO) share price continued its freefall this week after the company published weak financial results. Unlike other technology companies, Atos has crashed in the past three straight weeks and is hovering near its lowest point on record. It has dropped by more than 98% from its highest point in 2017, giving it a market cap of over 178 million euros.
Atos disappointing earnings
Atos has been one of the most embattled companies in Europe this year. The company’s woes accelerated last week when Airbus walked away from acquiring the data and securities firm. Airbus was considering a 1.8 billion euro deal.
The challenges escalated on Tuesday after the company published weak financial results and pressed on with restructuring efforts. One approach will be to sell its Tech Foundations and BDS businesses.
Atos generated over €10.7 billion in revenues in 2023, with its digital business accounting for 71% of the total. Its organic revenue growth was just 0.4% during the year while the company had a net loss of €3.4 billion. At the same time, its free cash flow was minus €1.07 billion.
Atos is facing numerous challenges. Its business growth has stalled while its total debt remains at an elevated level. It is now continuing its discussions with its bondholders and banks on a refinancing plan.
The management also warned that any refinancing plan will lead to dilution of existing shareholders. This means that it could lead to the company filing for bankruptcy if the refinancing options fail. Atos expects that the negotiations will end by July of this year.
Atos share price forecast
The weekly chart shows that the Atos stock price has been in a strong freefall in the past few years. It has collapsed below the important support level at €6.83, its lowest point in September last year.
Atos has collapsed below all moving averages, signalling that bears are in control. The Percentage Price Oscillator (PPO) and the MACD indicators have moved below the neutral point. Further, the Relative Strength Index (RSI) has continued moving to the oversold level.
Therefore, the outlook for the Atos stock price is extremely bearish in the coming weeks. If this happens, the next point to watch will be €1. It could also plunge to €0.50.
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