Vincorion's Revenues Are Soaring, Insiders Are Buying, and the EU Is Funding – So Why Are Shares Falling?

Defence supplier Vincorion shares tumble 12% with RSI at 22 oversold, despite 40% revenue surge and €1.2B order backlog. Berenberg maintains €26 target.

The defence supplier’s share price has tumbled roughly 12% over the past week, even as the company reports a 40% jump in quarterly revenue and its supervisory board places two separate bets on the stock. Maike Schuh, a member of the board, purchased around 9,000 shares in March at €17.00 apiece, and then on Wednesday this week bought additional positions at an average price of €20.89 – a total outlay of nearly €100,000 for the second tranche alone. The flagship holding now trades at €18.59, putting both transactions underwater. The Relative Strength Index stands at 22, deep in oversold territory.

The operational backdrop could hardly be more encouraging. Vincorion generated €69 million in sales in the first quarter, and order intake nearly quadrupled. The overall order book has swelled to €1.2 billion, underpinning management’s full-year guidance of roughly €300 million in revenue and an operating margin of 18% to 19%. A further strategic boost comes from the EU’s SENTINEL project, a €40 million research programme financed by the European Defence Fund. Vincorion is contributing two critical components for mobile field camps designed to operate under extreme conditions, positioning the firm for future NATO procurement contracts.

Yet the same growth story is squeezing cash flow. The company is pouring investment into production capacity at three sites and building inventories to work through the record backlog. Free cash flow turned negative to the tune of €7.1 million in the first quarter. Management still aims to generate €38 million in operating cash flow for the full year and insists the expansion can be financed entirely from internal resources. The market will get its next check on progress when half-year results are released on 12 August.

A structural quirk amplifies the volatility. Principal shareholder STAR Capital holds 47.5% of the equity and is locked in until autumn 2026. That leaves a wafer-thin free float, meaning positive news can send the stock sharply higher – but profit-taking or disappointment hits just as hard. After hitting a high of €22.58 in early May, the shares have shed more than 18% in three weeks.

Analysts at Berenberg are undeterred by the short-term noise and maintain a price target of €26 – nearly 40% above current levels. For that view to gain wider traction, the company needs to demonstrate that the cash drain is temporary and that the free cash flow line can turn positive in the summer. Until then, the disconnect between Vincorion’s operational firepower and its languishing share price looks set to persist.