Evotec’s Fresh Guidance Revision Sparks Confidence Crisis, Shares Plunge 15%

Evotec’s second profit warning in just four months has thrown the credibility of the Hamburg-based biotech into sharp relief, with investors now wrestling over whether its revenue shortfall is a mere timing issue or a symptom of waning partner demand. The stock tumbled 15.14% on Tuesday, closing at €3.53 – a stone’s throw from its 52-week low of €3.19 and down 30.37% in the past seven days alone.

The company slashed its full-year revenue forecast to a range of €570 million to €610 million, a drastic cut from the previous guidance of €700 million to €780 million. The adjusted EBITDA outlook was equally sobering: a loss of €70 million to €105 million, compared with earlier expectations of breakeven to a €40 million profit. The shares had settled at €4.16 the prior session, meaning the latest decline has wiped more than a third of the stock’s value year-to-date.

Evotec attributed the gap to three factors. Roughly 40% stems from milestone payments pushed back into 2027, while around 45% reflects weaker contributions from new strategic partnerships still under negotiation. The remaining 15% comes from lower-than-anticipated revenue recognition. The company’s half-year numbers, released as preliminary figures, also missed analyst forecasts: revenue of €300.1 million and an adjusted EBITDA loss of €42.7 million. Yet the balance sheet offers some buffer, with liquidity of €465.6 million as of June 30.

The restructuring programme dubbed “Horizon” is moving forward as planned. Management aims to cut annual costs by €75 million by the end of 2027, reduce its footprint to ten sites, and eliminate up to 800 roles. Automation and artificial intelligence are being woven more deeply into operations, with a sharper focus on high-value services and specific therapy areas. The company expects to deliver 20–30% of the targeted savings this year.

Should investors sell immediately? Or is it worth buying Evotec?

Analysts did not hold back. RBC’s Charles Weston labelled the new guidance “another material profit warning” but maintained an “Outperform” rating and a €10 price target, noting that underlying net sales in the core Discovery & Preclinical business rose roughly 28% in the first half. At Deutsche Bank, Fynn Scherzler expressed surprise at the severity of the cut, questioning Evotec’s heavy reliance on a handful of large contracts. “The setback fuels doubts about the hoped-for operational recovery,” he said.

Technical indicators point to a deeply oversold condition, with the relative strength index at 22.3 – a level that historically warns against panic selling but offers no guarantee of a near-term rebound. The stock now trades well below both its 50-day and 200-day moving averages, signalling a entrenched downtrend.

Attention now turns to an investor and analyst webcast scheduled for July 14, where management will face questions directly. The audited half-year report is due on August 13. Until then, the debate over whether Evotec’s troubles are merely a timing mismatch or a more permanent erosion of partner confidence will keep the shares under pressure.