Amplifon shares: Price analysis before buying or selling

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Yes

ISIN code: IT0004056880

Ticker: BIT: AMP

Index or market: FTSE MIB

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Elements to consider before selling or buying Amplifon shares

Analysis N°1

In particular, we will be following Amplifon's financial results in detail, comparing them systematically with analysts' expectations and the group's quarterly and annual targets.

Analysis N°2

The technological innovations that the Amplifon Group is likely to develop and bring to the market may of course also influence its share price and we will therefore follow with interest the research and developments in progress.

Analysis N°3

The ageing of the population will of course also have an impact on Amplifon's sales and the demographics of the countries in which it operates must be taken into account.

Analysis N°4

Finally, it goes without saying that you will also have to keep an eye on the increasingly strong competition in this business sector, especially from other large European groups, with all the interesting and influential news and publications.

Analysis before buying or selling Amplifon shares

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General presentation of Amplifon

To better understand how Amplifon's share price is likely to perform in the coming years, it is of course necessary to know this company in a serious way, especially regarding its precise activities. This is what we propose to you now with some explanations about this Italian group.

The Amplifon Group is an Italian group specialized in the hearing systems industry. Specifically, this company markets, adjusts and customizes hearing aids for the hearing impaired. In particular, it markets a generation of invisible hearing amplifiers, which are very small, state-of-the-art electronic instruments that receive, process and amplify sounds before transmitting them to the ear through advanced technology.

The products offered by the Amplifon Group address a wide range of hearing problems, from mild to severe hearing loss. To meet the needs of this market, Amplifon owns several popular brands such as Sonus, Miracle Ear, Beter Horen and Dialogue. Amplifon's products are distributed worldwide through various franchises and stores, including stores in the Netherlands, France, Canada, the United Kingdom, Switzerland, Spain, the United States, Egypt, Australia, New Zealand, Germany and India.

Photo credits: ©sylv1rob1/123RF.COM

The major competitors of Amplifon

Of course, even though Amplifon is currently the world leader in the hearing aid sector, it also faces competition from many more or less dangerous rivals. It is obvious that an analysis of this competition is essential before taking a position on this value and that is why we are now proposing to discover who are the biggest competitors of Amplifon.

Audika

Amplifon's biggest competitor today is undoubtedly the Audika Group, which has more than 450 centers worldwide and, like Amplifon, has an average turnover far higher than that of the independents.

Audio 2000 and Entendre

But there are also competitors of intermediate size in terms of networks and who also generate a comfortable turnover. These include Audio 2000 and the Entendre cooperative network. Both of these companies are positioned with an aggressive pricing strategy. Still among the medium-sized competitors, there are also companies offering a more upmarket range, such as Audition Conseil.

Other competitors

We will also take into account competitors offering both audio and optical solutions, which may represent a significant threat to Amplifon. These include the Krys and Alain Afflelou groups, but especially the Optical Center group, which is currently the leader in these mixed brands.

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The factors in favour of a rise in the Amplifon share price:

Let's now review the main strengths of the Amplifon Group that can boost its share price in the medium or long term. After having presented these strengths, we will come back to the weaknesses of the Amplifon group.

Firstly, Amplifon is the international leader in its field with hearing solutions sold worldwide and a market share of 9%. It is number one in the industry in countries such as Italy, the Netherlands, Switzerland, New Zealand and Egypt and number two in France and Spain.
Amplifon's business model is also an undeniable advantage of this group which allows an efficient distribution of its products in more than 20 countries with 2400 points of sale and more than 1700 affiliates. Amplifon can also rely on 5,250 professionals worldwide and 5,100 franchisees and agents who provide strong brand awareness and recognition.
It should also be noted that the hearing aid market is a very resilient market in the healthcare sector with some of the strongest growth potential due to global demographic trends and given that the vast majority of hearing disorders occur with age.
Amplifon has also been able to strongly improve its regional diversification, notably since 2011 with the complete consolidation of its network, especially in Australia with the acquisition of National Hearing Care.
Amplifon's size and worldwide recognition also allows it to save on the production costs of its devices. The group has a strong negotiating power with its suppliers and can therefore buy these devices at a lower price.
Investors also appreciate the fact that the company's equity ratio has improved significantly in recent years, as has the fact that its debt is low. The group's moderate dividend payout policy is also an attractive feature, as is its satisfactory cash flow and good financial flexibility.

The factors in favour of a drop in the Amplifon share price:

Of course, the Amplifon Group does not have only advantages and its stock is not a perfect stock that ensures you success in case of a buying strategy. Indeed, this company also has some weaknesses that we now propose to discover in more detail with some explanations.

First of all, it should be remembered that Amplifon's operating leverage is relatively high with 60% of fixed opex, although it shows a low dependence on the economic situation, which may contribute to increasing its expenses and reducing its margins over the long term.
It should also be noted that the Amplifon Group and its activities are highly exposed to changes in the regional regulatory environment, particularly with respect to the reimbursement of hearing aids and the conditions set by health insurance companies, which can be increasingly strict depending on the technology used and the client's preferences.
Although the Amplifon Group has successfully expanded internationally and now markets its products worldwide, its activities are still very much concentrated in Europe, as this market alone generates a very large proportion of its turnover.
Although the group's debt is currently relatively low, Amplifon's strategy to fight the increasing competition requires a lot of investments to finance acquisitions or store renovations. However, this additional cost could quickly weigh on debt and reduce the company's overall profitability in the long term. Similarly, other significant costs are generated by the group's international expansion with the start-up of activities in certain countries which also require very high levels of investment.
Competition, as we have just seen, is one of the main handicaps of the Amplifon Group. This competition is so strong that it exerts significant pressure on prices, which forces Amplifon to adopt a similar strategy by reducing its margins. In recent years, we have also seen a change in the competitive landscape with the rise of chain opticians, hearing aid manufacturers and online sales.
Finally, the last disadvantage of the Amplifon Group concerns its growing need for specialized personnel. This staff must be trained in this specialty and undergo continuous training in order to maintain their ability to meet the needs and requirements of the group's customers. However, such personnel are scarce and the cost of such training is high.

You must now compare these strengths and weaknesses with the current events of this group in order to perform a complete fundamental analysis of this stock.

The information supplied here is only for indicative purposes and should not be used without the completion of a comprehensive and complete fundamental analysis of this asset notably taking into account exterior data, future publications and announcements and all fundamental events and news that could influence the strengths and weaknesses or make them more or less significant. This information does not in any way constitute recommendations relating to the completion of transactions or a solicitation to buy or sell an asset.

Frequently Asked Questions

What are the brands owned by the Amplifon Group?

The Amplifon group offers its products through various brands, including the original Amplifon brand, which has existed since 1950, but also other brands. These include the Dutch brand Beter Horen, the American brand Miracle Ear, the Australian brand National Hearling Care, the New Zealand brand Bay Audiology, the Tuqrue brand Maxtone, the Israeli brand Medtechnica Ortophone and the New Zealand brand Dilworth Hearing. All of these brands have been acquired by Amplifon over the past decades.

What is the global presence of the Amplifon Group?

Thanks to its international expansion strategy, the Amplifon Group is today at the head of a network of 10,000 points of sale and employs 14,000 people in 21 different countries around the world. Among the countries in which the group is established are of course Italy, but also France, the Netherlands, Germany, the United Kingdom, Ireland, Spain, Portugal, Switzerland, Belgium, Luxembourg, Hungary, Poland, Israel, Turkey, the United States, Canada, Australia, New Zealand, India and Egypt.

How can I find out about future trends in Amplifon shares?

In order to know as precisely as possible how Amplifon's share price is likely to evolve in the long term, it is necessary to carry out two types of analysis, namely technical analysis and fundamental analysis.

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Analysis before buying or selling Amplifon shares