DALLAS, TX -- July 9, 2026 -- Aebi Schmidt Holding AG (NASDAQ: AEBI): Stonegate Capital Partners Initiates Coverage on Aebi Schmidt Holding AG (NASDAQ: AEBI). AEBI’s 1Q26 sales line was muted, but not because demand softened. Reported sales were $456M, roughly flat on the Company’s combined basis, while like-for-like sales increased 7% excluding Blue Arc. The quarter followed AEBI’s normal seasonal cadence, with order intake up 9% to $508M and backlog reaching $1.26B, up 23% y/y. Management expects backlog conversion to become more visible in 2Q26 and through the second half, especially in North America walk-in vans. Adjusted EBITDA increased 6% to $33.1M, with margin up 40 bps to 7.3%, driven by Europe margin improvement while North America absorbed ramp costs ahead of expected conversion.
Europe Growth: Europe & RoW is the smaller segment, but it was the margin proof point in 1Q26. Sales increased 16% organically, while adjusted EBITDA increased 201% to $6.8M. This was driven by better pricing, higher volume, improved material availability, and more After Sales contribution. The €40M Aéroports de Paris win adds up to 29 airport machines plus a 20-year service agreement. This is the ideal AEBI business model where equipment sales bring service revenue behind them.
North America Growth: North America is the main post-Shyft value driver. The segment generated $337M of sales in 1Q26, with 3.6% like-for-like growth excluding Blue Arc, while backlog increased 29% y/y. The near-term focus is converting walk-in van orders into revenue beginning in 2Q26, with management pointing to higher output from the Chicago Supercenter and improving production efficiency. Shyft is already helping broaden AEBI’s U.S. platform, but the real upside is still ahead with more service attachment, service body in-sourcing, better fixed-cost absorption, and higher parts / repair / refurbishment revenue over time. After Sales was only ~11% of North America sales, leaving a clear mix opportunity as AEBI builds technician capacity and service coverage.
Balance Sheet and Liquidity: The balance sheet gives AEBI enough room to fund the build and integration work. The Company ended 1Q26 with $115.9M of cash, $454.8M of net debt, and leverage of 2.88x. Net working capital increased sequentially to $448.5M as AEBI built inventory ahead of expected revenue conversion, but still improved modestly y/y. Operating cash flow was seasonally negative at $17.7M used, better than the $26.6M used last year. Going forward it is expected that AEBI will convert backlog into revenue, release working capital, and bring leverage down toward management’s ≤2.0x year-end target.
Outlook: Management reaffirmed FY26 guidance for sales of $1.95B-$2.15B, adjusted EBITDA of $175M-$195M, and year-end leverage of ≤2.0x. The year remains back-half weighted, with management expecting roughly 45% of FY26 revenue in 1H and 55% in 2H. The setup is built around walk-in van conversion, higher output at the Chicago Supercenter, airport and municipal demand, and merger synergies. The key items we are keeping our eye on in the next few quarters are North America margin recovery, After Sales mix, working capital release, and commercial demand.
Valuation: We use a P/E Comp Analysis, DCF Model and EV/EBITDA comp analysis to guide our valuation. Our P/E Comp Analysis arrives at a valuation range of $14.55 to $15.76 with a mid-point of $15.15. Our DCF analysis produces a valuation range of $16.05 to $17.96 with a mid-point of $16.94. Our EV/EBITDA valuation results in a range of $16.33 to $17.72 with a mid-point of $17.02. When combined using a simple average we estimate a valuation range of $15.64 to $17.14 with a mid-point of $16.37.
