Vincorion's Analyst-Endorsed Growth Story Collides with a €7.1M Cash Drain

Despite a 13% weekly drop and negative free cash flow, analysts remain bullish on Vincorion, citing a €1.2B backlog and record orders from defense contracts.

While Vincorion's stock slid 13% in the past week to close at €19.17 on Wednesday, analysts remain firmly in the bull camp. JP Morgan rates the shares "overweight" with a €23.50 target, and Berenberg sees fair value at €26 — implying upside of 22% and 36%, respectively. The confidence stems from a €1.2 billion order backlog that already locks in more than 90% of the company's 2026 revenue target, yet the market's attention has fixed on a less flattering number: negative free cash flow of €7.1 million in the first quarter.

The cash burn is a deliberate, if painful, consequence of rapid scaling. Vincorion is pouring money into working capital to fulfill big-ticket defense contracts, including work on the Leopard 2 tank, and has launched a hiring offensive to expand its 900-strong workforce. CEO Kajetan von Mentzingen is positioning the company to handle a surge in demand that shows no sign of abating: order intake more than quadrupled year-on-year to roughly €149 million in the first three months, the best quarterly inflow in the company's history.

Revenue rose 40% to €69 million, the highest ever for an opening quarter, with vehicle systems jumping 60% and power supply systems climbing 43% on strong demand for ground-based air-defense equipment. Adjusted operating profit came in at €12.4 million. Yet the cost of building inventory and financing production for large projects pushed the free cash flow into negative territory — a dynamic the management team considers temporary.

On the technical side, the shares appear stretched to the downside. The relative strength index has fallen to 22, firmly in oversold territory, and the stock is trading well off its 52-week high of €22.58 reached in early May. Over the past month, however, Vincorion has still managed a gain of nearly 23%, offering some perspective on the recent pullback.

Management has kept its full-year guidance unchanged, targeting average revenue of €300 million and an operating margin of up to 19%. The medium-term ambition is to grow sales by 15% annually. Analysts point to the Bundeswehr’s special fund as a structural tailwind that is now flowing through to suppliers. If Vincorion can stabilize its cash flow over the coming quarters, the case for a return to the 52-week high becomes easier to make — even after a week that reminded investors that breakneck growth rarely comes without a price.