AI Customer Engagement And Margin Expansion Will Shape A Steady Long Term Outcome

Catalysts

About CM.com

CM.com provides communication, payments, ticketing and AI driven customer interaction solutions on a single platform.

What are the underlying business or industry changes driving this perspective?

• The shift toward AI powered customer engagement places CM.com’s HALO Agentic AI platform, Voice AI and context data platform in a segment where clients are seeking automation of contact centers and marketing journeys. This can support subscription revenue growth and higher gross profit over time.
• Growing demand for richer digital communication across channels such as WhatsApp, RCS, voice and email aligns with CM.com’s role as both telecom operator and payments institution. This can support further messaging volumes and transaction driven revenue.
• The increasing focus on responsible and regulated AI use in Europe aligns with CM.com’s ISO 42001 certification and European regulatory compliance. This can help sustain enterprise adoption in regulated sectors and provide support for recurring revenue and client retention.
• Ongoing product mix shift toward higher margin services and AI enabled offerings, combined with four consecutive years of gross margin expansion to 31.3% and structurally lower operating expenses, supports the company’s ability to translate future topline growth more directly into EBITDA and net margin improvement.
• The trend toward integrated platforms for marketing, service, payments and live experiences, instead of fragmented point solutions, fits CM.com’s unified customer interaction platform and could increase wallet share per client, supporting annual recurring revenue and earnings.

Assumptions

How have these above catalysts been quantified?

• Analysts are assuming CM.com's revenue will grow by 4.8% annually over the next 3 years.
• Analysts assume that profit margins will increase from -1.5% today to 3.7% in 3 years time.
• Analysts expect earnings to reach €11.0 million (and earnings per share of €0.23) by about July 2029, up from -€3.8 million today.
• In order for the above numbers to justify the price target of the analysts, the company would need to trade at a PE ratio of 28.0x on those 2029 earnings, up from -64.6x today. This future PE is lower than the current PE for the NL Software industry at 134.9x.
• Analysts expect the number of shares outstanding to grow by 3.19% per year for the next 3 years.
• To value all of this in today's terms, we will use a discount rate of 7.8%, as per the Simply Wall St company report.

Risks

What could happen that would invalidate this narrative?

• Management is targeting a return to revenue growth from the first quarter of 2026 and talks about a solid foundation for the next phase of profitable growth. If AI adoption, HALO uptake and ARR growth continue to build on the recent 7% annual recurring revenue increase, that could support higher revenue and earnings than a flat share price view implies, particularly if the 18.4 million EBITDA result in 2025 becomes a base for further profit growth.
• The company is positioning HALO and its AI first platform as central to future customer interaction across marketing, service and payments, and early client feedback is described as enthusiastic with clear efficiency gains. If this translates into broader use across regions beyond the Benelux and into larger marketing budgets, it could lift ARR, gross profit and net margins more than a stable share price expectation assumes.
• CM.com highlights a distinctive combination of Agentic AI, telecom operator status and licensed payments capabilities that competitors may find hard to replicate quickly. If this integrated offering continues to attract global brands and supports record messaging and payments volumes similar to those seen in 2025, the effect on transaction based revenue and EBITDA could contradict the idea that the equity will simply move sideways.
• Four consecutive years of gross margin expansion from 25.4% to 31.3%, along with operating expenses reduced from €94.3 million in 2022 to €61.5 million in 2025 and higher gross profit per employee, suggests an operational trend toward better profitability. If this cost discipline combines with any return to top line growth after the 5% revenue decline in 2025, the improvement in net margin and earnings could support a stronger share price than expected.
• The balance sheet has been reshaped through refinancing of the €100 million convertible bonds into an €80 million revolving credit facility plus €25 million of new equity, and net debt and leverage have already moved down to €61.9 million and 3.1x. If continued working capital control and profit generation further reduce leverage, lower financial risk and interest costs could improve net income and challenge the assumption that the market will not re rate the stock.

Valuation

How have all the factors above been brought together to estimate a fair value?

• The analysts have a consensus price target of €6.75 for CM.com based on their expectations of its future earnings growth, profit margins and other risk factors.
• However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of €7.5, and the most bearish reporting a price target of just €6.0.
• In order for you to agree with the analysts, you'd need to believe that by 2029, revenues will be €298.6 million, earnings will come to €11.0 million, and it would be trading on a PE ratio of 28.0x, assuming you use a discount rate of 7.8%.
• Given the current share price of €7.36, the analyst price target of €6.75 is 9.0% lower. The relatively low difference between the current share price and the analyst consensus price target indicates that they believe on average, the company is fairly priced.
• We always encourage you to reach your own conclusions though. So sense check these analyst numbers against your own assumptions and expectations based on your understanding of the business and what you believe is probable.