Euronext launches the Tech Leaders segment in partnership with Early Metrics
By Anais Masetti - 07 June 2022
Euronext, the leading equity listing venue in Europe, has launched the Tech Leaders segment along with an index and a suite of new services. The segment is composed of more than a hundred high-growth and leading tech companies, representing €1tn of market capitalisation. All of these companies meet a specific set of criteria to qualify and are listed on one or several Euronext venues. The initiative also includes a dedicated set of services for listed and private tech companies.
Early Metrics is proud to be among the partners chosen by Euronext to support the creation of the Tech Leaders segment. This new initiative is in the continuation of the partnership between Euronext and Early Metrics launched in 2021 to provide transparent, thorough analytical reports on listed small-cap tech companies. These detailed research notes are accessible to all investors (including retail ones) and on all Euronext Tech Leaders companies, as well as on the segment’s major trends.
Euronext renews its commitment to the tech sector
Through the launch of this new segment, Euronext shows its continued commitment to the growth of the European tech scene and the democratisation of investment in fast-growing tech companies. A mission that is also fully shared by Early Metrics.
Euronext will offer to its community of Euronext Tech Leaders the following services:
- Euronext Tech Leaders index, encompassing all member companies of the Euronext Tech Leaders segment;
- A full suite of advisory and communication services to raise the international profile of listed European tech companies;
- Membership to the C-level club granting exclusive access to top tier events organised by Euronext and its network of partners, including the Euronext Tech Leaders Campus, the annual meeting for European Tech companies;
- Improved trading conditions on Euronext Tech Leaders stocks for retail investors as well as analytics coverage, thanks to Euronext’s partnership with Early Metrics.
Alongside this segment, Euronext and its partners are launching a full range of dedicated “pre-IPO” services to provide tomorrow’s tech leaders with the best possible support for listing on Euronext markets, thereby helping them to finance their growth and form the next generation of European tech giants.
Early Metrics for Euronext Tech Leaders
Since 2021, Early Metrics and Euronext have been collaborating to develop a segment-specific analytical method with the aim to improve the analytical coverage of small-cap tech companies. This method is now used to provide reports on all the tech companies in the Euronext Tech Leaders segment.
As mentioned above, these reports improve trading conditions for retail investors as they allow them to get a comprehensive view of each company’s financial performance and growth potential. Indeed, each report provides data and insights on the growth momentum, financial resilience, valuation and market liquidity of the listed tech company.
Antoine Baschiera, the co-founder of Early Metrics, commented: “We are very happy to further our collaboration with Euronext in the context of the Euronext Tech Leaders segment. We have drawn from our experience of rating the growth potential of over 4000 tech SMEs in order to create analytical reports that will hopefully empower investors and foster the birth of new European tech giants.”
Early Metrics’ methodology to analyse small-cap tech companies
Early Metrics has built a specialised methodology to analyse tech companies listed on Euronext’s segments. To analyse the growth momentum, the company’s annual growth momentum is compared to that of its peer group based on reference classifications, using four indicators:
- revenue growth,
- EBITDA growth,
- headcount variation,
- revenue per FTE ratio.
Four other indicators are used to calculate the financial resilience of the company:
- net profit margin,
- cahs available to operating cash flow ratio,
- working capital requirement to revenue ratio,
- net debt to shareholder equity ratio.
The valuation of the company is calculated using market capitalisation ratios on revenue and EBITDA. Here again, the company’s valuation is compared to those of its peers in the same sector, sub-sector, capitalisation level and revenue level. Finally, the market liquidity is assessed based on the average trading volume (i.e. the annual average of the daily volume traded) and velocity (i.e. the average holding period of a share).
To find out more about this methodology, you can visit the Euronext website.
A new era for the European tech ecosystem
Today, the European tech ecosystem is incredibly dynamic, with an increasing number of trailblazing SMEs and an ever-growing community of investors emerging. The Euronext Tech Leaders segment will provide vital support to late-stage tech startups and will further fuel the growth of this booming tech sector. Early Metrics alongside Euronext is fully committed to providing the best analytical tools to investors and tech companies, bringing transparency and trust to this exciting space.