Webuild (WBD IM) Italy

Industrials

Forensic Alpha

Signs of aggressive revenue recognition and potential EBITDA manipulation at this global construction company - Forensic Alpha highlights a growing receivables balance, despite the use of factoring, paired with declining quality of those receivables (a proportion of which are long-outstanding invoices to their own suppliers). Adding to their scepticism of management’s presentation of results is the reported €780m EBITDA - where the main source of profit is management’s inclusion of a “Gain From Bargain Purchase” amount of €548m. Dragonfly (Forensic Alpha’s machine intelligence system) assigns the stock a 10 out of 10 risk rating.

- 10 December, 2021