Atos SE, the French multinational IT services and consulting company, has been under intense scrutiny following its Combined Annual General Meeting (AGM) held on January 31, 2025. With all proposed resolutions approved—including leadership changes, validation of financial reports, Atos SE Reverse stock split—the company finds itself at a critical juncture. So, what does this mean for Atos’s future and for us as investors?
Before we go to the article, you might be interested in knowing which were the proposals for Atos SE.
Leadership Reshuffle: Philippe Salle Takes Charge
One of the most significant outcomes of the AGM was the appointment of Philippe Salle as Chairman and CEO, effective February 1, 2025. Salle takes over from Jean Pierre Mustier, who stepped down. The decision to consolidate the roles of Chairman and CEO signals a more centralised decision-making structure, which could be key to streamlining the company’s restructuring efforts.
Salle’s leadership will be crucial as Atos navigates financial difficulties and strategic changes. His expertise in corporate restructuring and operational efficiency could provide the stability Atos needs. Investors will be closely monitoring whether his leadership leads to improved financial performance and a boost in shareholder value.
Reverse Stock Split: A Bold Move
Another major resolution discussed at the AGM was the proposed reverse stock split. Atos is considering up to a maximum of 1:10,000 reverse stock split, which would consolidate 10,000 existing shares into one new share. The goal is to reduce share volatility, improve liquidity, and attract institutional investors. If you are unsure in how this affect your investment, we dedicated a full article on explaining the impact of Atos SE proposed reverse stock split.
For existing shareholders, this could present challenges. Those holding fewer than 10,000 shares (if it is confirmed this reverse stock split rate) would need to either purchase additional shares or sell their holdings within a limited timeframe. This move could push smaller shareholders out, concentrating ownership among institutional investors, but realistically, this is such a small amount, ~£30, that won’t make a difference.
If Atos goes ahead with the reverse split, the stock price will be adjusted accordingly. For example, if the pre-split share price is €0.0029 (the current price), a 1:10,000 split would result in a post-split price of €29 per share. While this may make the stock more attractive to large investors, we want to remind that it does not change the company’s fundamental valuation or the value of your investment. The real question is whether Atos can regain investor confidence and reverse its financial struggles.
How high can Atos SE Stock Price go realistically?
Well, the upper limit is the sky being a technological company, but it could be also go wrong and disappear as a company. To understand what the future price of Atos SE stock could be, we will compare current market cap against what they had in the previous years. The theoretical stock price based on the previous market cap of Atos is derived by considering the company’s current number of shares outstanding and its previous market cap. For this calculation we will use the higher market cap recorded in 2017, which was €12.667 billions.
- Current stock price: €0.0029
- Shares outstanding: 179.04 billion shares (as of recent filings)
- Previous market cap: €12.667 billion (as reported in 2017)
If Atos were to recover its previous market cap of €10 billion, using the current number of shares outstanding (179.04 billion), we can calculate the stock price as follows:
€12.667 billion ÷ 179.04 billion shares = €0.0708 per share.
This means that, to return to its former market cap of €12.667 billion, Atos’s stock price would need to rise to approximately €0.0708 per share, representing an increase of about 2,440% from its current price of €0.0029. Wait, wait, wait! Stop dreaming about that massive return. This is merely theoretical if Atos recover that market cap, but for that, there is a lot of work to be done within the company and that may take years, first of all, being profitable.
Proposed Share Buyback Program: A Boost for Investors?
In addition to the reverse stock split, Atos has proposed a share buyback program, aimed at enhancing shareholder value and stabilizing its stock price. Remember that on their statement, they said all proposals were approved and this was one of them. The company plans to repurchase up to €895,179,898,215 at a maximum price per share of 50 euros worth of its own shares in the coming year (they have 18 months to execute from general meeting date), with the goal of reducing the overall number of shares outstanding and increasing stock price (this is what normally happens when buyback is executed). For those that wish to have more information, you have all the information proposed by Atos SE
The share buyback program will focus on purchasing shares at current market prices, which means they may acquire shares at around €0.0029 per share, depending on market conditions (it is volatile now). However, if the reverse stock split is executed, the stock price could be 10,000 times more (depending on split rate), and Atos could adjust its buyback strategy to reflect the new post-split price. In our opinion we have the feeling that they will do a 1:10000 rate, moving the stock price to around 30s, and that would make sense to buyback ‘up to a maximum of 50 per share’.
While the buyback program can create upward pressure on the stock price by reducing supply, it will not directly affect Atos’s underlying financial performance or market value. The true impact of the buyback will depend on the company’s ability to execute its restructuring plan and deliver strong earnings in the coming months.
Financial Standing and Market Sentiment
Atos has experienced a difficult year, with its stock price under pressure due to ongoing restructuring and declining profitability. The company’s market capitalization, which once surpassed €10 billion, is now just a fraction of that, about half a billion. If Atos were to reach its previous market cap, its stock price would need to climb considerably.
Stock Price Forecast: Atos’s stock price today stands at €0.0029 per share. If the company were to recover to its former market cap of over €12 billion, this would imply a significant increase in its stock price. Based on its current number of shares outstanding (179.04 billion), Atos would need its stock price to rise as we said previously to approximately €0.0708 per share to reach that market cap, suggesting a 24 times from its current value.
However, this is a highly optimistic forecast and would require Atos to execute a successful restructuring plan, increase profitability, and restore investor confidence. The first target in our opinion is to see a change on their tendency on the two following quarters to gain confidence again from the investors. So for a more realistic target for Atos’s stock price will depend on their ability to deliver strong earnings and clear strategic direction.
Should You Buy Atos? Is Atos SE a Good Investment?
UPDATE: With Atos’s stock trading at around €0.0033, many investors are asking, “Is Atos SE a good investment?” They see a psychological ‘low price’ compare to previous highs on the 80 per share, however they are forgetting the massive dilution that the stock has suffered that explains the ‘low price’. The company has certainly faced significant challenges over the past year, but it is making bold moves to restructure and improve its financial standing. To consider if Atos SE is a good investment it will depend on which is your entry price. Looking at how the company has suffer recently, it seems to have reached a bottom, although it can always go worse becoming bankrupt, the general expectation is that in the long term we can see improvements.
Reasons to consider buying Atos stock:
- Leadership Change: The appointment of Philippe Salle could signal a new era of operational efficiency and stability.
- Reverse Stock Split & Buyback Program: While these moves may present challenges, they could also attract institutional investors, improve liquidity, and reduce share volatility.
- Restructuring Plans: Atos’s ongoing restructuring efforts could eventually lead to a more profitable and competitive company.
Risks to consider:
- Uncertain Financial Recovery: The company has not yet demonstrated clear signs of financial turnaround, and it will take time to see the results of its restructuring efforts.
- Market Sentiment: Investor confidence is still fragile, and the company’s future stock price is closely tied to the successful execution of its strategic plans.
- Execution of Key Decisions: If the reverse stock split or leadership changes fail to yield results, Atos could face continued declines.
Atos SE Stock Price: What’s the Outlook?
As of today, Atos’s stock price is €0.0029, which is a far cry from its once-mighty valuation. However, the company’s market cap has fallen significantly in recent months, and a full recovery could take years of strong performance and strategic success. A reverse stock split and buyback program, if implemented, could change the perception of the company, making it more appealing to larger investors. However, there were also other measures as a proposal to issue more shares that could work in the opposite way for stock price. At the time of writing, there is only a confirmation of approval by shareholders, but there is not much detail in when will Atos SE stock reverse split and at what split rate. The same situation happens with the issuance of shares, there is no confirmed details on how they would do it and at what stage.
When is Atos’s Next Earnings Report?
Atos’s Q4 2024 earnings report is expected to be released in mid-March 2025. This will provide investors with critical insights into the company’s cash flow, debt reduction efforts, and ability to execute its transformation strategy. The market will be closely watching for signs of improved profitability and progress on its restructuring efforts.
What’s Next for Atos?
UPDATE: Read our latest article on where could be Atos SE Stock in next five years.
Atos’s AGM marked a turning point for the company, but whether these changes will lead to a successful transformation remains to be seen. Investors should keep a close eye on upcoming financial disclosures, including the Q4 2024 earnings report, which will offer insight into Atos’s cash flow, debt reduction efforts, and ability to execute its strategy.
With a strong leadership team now in place and a potential reverse stock split and buyback program on the horizon, Atos is making the right moves to stabilise. But whether the company can return to its former glory remains uncertain. Investors will need to stay tuned to see if Atos can turn things around and achieve long-term growth, but what it seems clear, is that this is not to happen overnight.
What do you think about Atos’s decisions? Are you considering investing in Atos SE? Share your thoughts in the comments below!
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