Evotec's Two Engines Stall Simultaneously as Shares Grind Toward a Decade Low

Evotec stock slips to €3.25, near 10-year low, after Q2 revenue drops 19.2% and both divisions post losses; guidance unchanged.

The German drug discovery contractor is running out of places to hide. Evotec's stock slipped another 3.4 percent on Monday to €3.25, leaving the shares barely 1.9 percent above their 52-week trough — a marker that now sits uncomfortably close to the company's worst levels in a decade.

Monday's slide came as part of a broad risk-off move that swept across global markets. A US military strike on targets in Iran pushed crude prices sharply higher, while futures markets repriced the odds of another Federal Reserve rate hike in September to above 60 percent, up from roughly 41 percent just a week earlier. Asian benchmarks such as the Nikkei fell hard, and the DAX opened the week on the back foot. For a loss-making, rate-sensitive growth name like Evotec, that combination proved toxic.

Yet the macro backdrop only tells part of the story. The Göttingen-based company's relative weakness within its own sector is striking: rival Lonza gave up just 1.2 percent on the same day, a fraction of Evotec's decline. That gap points to company-specific pressures that have been building since the summer.

Both Core Divisions Shrink at Once

The most uncomfortable detail in Evotec's half-year report, confirmed on Saturday, is that neither of its two main businesses is growing. Discovery & Preclinical Development — long the group's backbone — saw second-quarter revenue fall 15.8 percent to €108.1 million, with adjusted EBITDA swinging to a loss of €14.6 million from a €2.5 million deficit in the prior-year quarter. The Biologics arm, Just-Evotec Biologics, fared no better: revenue dropped 17.4 percent to €35.4 million, and its adjusted EBITDA loss widened to €6.2 million.

Group-level figures tell the same story. Second-quarter revenue came to €300.1 million, down 19.2 percent year on year, while adjusted EBITDA sank to minus €42.7 million from minus €1.9 million. The loss per share deepened to €0.26 from €0.24 in the same quarter last year, even as revenue contracted by 16.21 percent to €143.48 million on that metric.

The company has stuck with the guidance it slashed more than a month ago: full-year 2026 revenue of €570 million to €610 million and adjusted EBITDA between minus €70 million and minus €105 million. Analysts, for their part, are modeling a per-share loss of €1.297 for the current year — a projection that keeps the stock firmly in "show me" territory.

A Decade-Long Slide, Measured in Percentages

The chart tells a grim tale. Last Tuesday, the shares touched €3.31, their lowest print in ten years. By Friday's close of €3.37, the stock was a mere 5.5 percent above its 52-week low of €3.19. The distance to the 52-week high of €7.75, reached last November, is a yawning 57 percent.

The technical picture offers little comfort. The stock trades deep below all major moving averages, a condition that has persisted since the profit warning issued over a month ago. The relative strength index sits at 38.9 — not yet signaling extreme oversold conditions, but the trading range of recent weeks has hugged the floor.

Strategic News Fails to Move the Needle

The market's indifference to corporate announcements has been telling. A month ago, Evotec unveiled an AI-powered research collaboration with Odyssey Therapeutics focused on autoimmune and inflammatory diseases. The news did nothing to stabilize the shares, which have continued to drift lower ever since. Investors are clearly prioritizing hard operating metrics over strategic narratives — and the hard numbers remain unambiguously weak.

Higher interest rate expectations only compound the problem. For a biotech contractor with pipeline projects that won't generate profits for years, rising rates inflate the cost of funding future losses and shrink the present value of distant earnings. A company whose revenue is shrinking by double digits and whose losses are widening has little natural support in such an environment.

The question now is whether the current valuation represents a buying opportunity or a realistic reassessment. The confirmed — but not beaten — guidance suggests management itself doesn't see the trough as definitively behind them. Until both segments show signs of stabilization, the burden of proof rests squarely on operational execution, not promises.