This is a further sign of confidence in this French player specializing in autonomous marine robotics and inertial navigation systems, which is buoyed by double-digit growth prospects in a favorable geopolitical environment.

A few words first about the industrial strategy deployed by the Gorgé family (44% stake in capital). The company underwent a strategic shift in 2018, which resulted in a refocus on autonomous robotics, precision navigation, and critical technologies. The restructuring was completed in 2022 with shareholder approval of the transition of the Gorgé Group to Exail Technologies, named after its most dynamic and profitable subsidiary.

It's been an explosive journey... even compared to the booming European defense sector. Perhaps the market realized a little late that there was stock picking to be done beyond BAE Systems, Thales, and Leonardo?

Trendy, but not just that

The most complicated task for an analyst arriving in the middle of such a success story is to separate the wheat from the chaff, or rather, to separate the hype from the company's real fundamentals, to put it in more modern terms. Berenberg's analysis is part of a broader trend: the market for autonomous robotics, and more specifically underwater robotics, is changing scale.

In the underwater field, the narrative has recently been reinforced by powerful images: those of the considerable damage inflicted on several occasions on the Russian conventional military fleet in the Black Sea by Ukrainian underwater drones. It's a kind of modern version of the Italian Maiale of World War II. Exail doesn't just do military or offensive stuff, but that's clearly where investors saw leverage.

Defense budgets are skyrocketing, NATO is accelerating its ambitions, and electronic warfare is driving the increasing autonomy of equipment. Exail is ideally positioned to benefit from this. Thanks to the acquisition of iXBlue in 2022, the group is now vertically integrated and capable of offering complete mine clearance drone systems without relying on US technology.

A full order book and integrated production tool

One of the strengths highlighted by Berenberg is the depth of Exail's order book, which exceeds €1.1bn, with more than 75% in defense. Exail has racked up a string of commercial successes, such as the historic contract with the Belgian and Dutch navies (€570 million) and a recent €400m contract with a non-NATO country. As the company moves into mass production, margins are improving significantly: Berenberg anticipates adjusted EBITDA of 25% in 2027 (compared with 19.8% in 2024), with average annual sales growth of 18% over the period.

Despite a huge rise since the beginning of the year, Exail remains reasonably valued, according to Berenberg, with an EV/EBIT multiple of 18x in 2027, in line with its peers. However, its unique positioning in a fast-growing niche market, coupled with its ability to secure long-term contracts, could justify a premium. The broker sees each new contract announcement as a potential catalyst for the stock, in a context where global demand for autonomous underwater systems continues to strengthen.