TeamViewer – A German Internet of Things Stock

Godwin’s Law proposes that the longer an Internet comment section goes on, the greater the probability that someone will compare someone or something to Adolf Hitler or his deeds. At that point in time, the side making the accusations automatically loses the argument because they clearly haven’t thought through what they’re saying.

When zee Germans decided to invade Poland in 1939, it kicked off a war that nearly every country in the world participated in. At the end of World War 2, Germany took less than two decades to rebuild, and is now the largest economy in Europe. Around 90% of all shares trading on German exchanges pass through a single electronic trading system – Xetra. Today, we’re going to talk about a German Internet of Things (IoT) stock that trades on Xetra – TeamViewer AG (TMV.DE).

A German Internet of Things Stock

Our recent article on The Remote Connectivity Investing Thesis talked about a lesser-known stock we uncovered that provides a play on IoT and augmented reality, similar to PTC. Founded in 2005, German company TeamViewer AG provides solutions that are used by more than 200 million users in every country and territory on this planet. (That’s more people than the total population of France, the UK, and Italy combined.) With a market cap of around $9.5 billion dollars, TeamViewer has been growing revenues at a compound annual growth rate (CAGR) of +34% over the past four years.

Credit: Nanalyze – Source data: TeamViewer AG

TeamViewer’s flagship offering is a remote connectivity software suite that’s used to connect to machines and devices, something that’s coming in quite handy with everyone working from home right now. Even before the Rona reared its ugly head, TeamViewer was emphasizing in their investment deck that the future of work will be working from home. Fortunately, we can largely overlook the temporary effects of coronavirus on TeamViewer because it hasn’t been subjected to the sort of hype that companies like Zoom have.

The Rona Effect

You cannot discuss the performance of any stock without comparing it to a benchmark. In the case of TeamViewer AG, we use the exchange they trade on as a benchmark to determine how well the stock has performed. Since the first news of the Rona came on December 31st, 2019, we can easily see how any asset has been affected by simply looking at year-to-date performance. Here are those numbers:

  • TeamViewer AG: +26%
  • Xetra benchmark: -2%

While TeamViewer AG outperformed an appropriate benchmark, they certainly didn’t experience the sort of +500% price appreciation that Zoom did. That’s not to say that TeamViewer is trading at bargain prices, it’s simply that their stock price doesn’t appear to have been affected by a temporary thesis. As potential buyers of the stock, that’s a good thing. We don’t like to take short-term stock price movements into consideration when deciding whether or not to invest in a disruptive technology stock.

TeamViewer as an IoT Stock

When looking at the IoT technology stack, the MBAs over at McKinsey have highlighted two areas that have the most growth potential – enablement platforms and business applications.

Credit: McKinsey & Company

In our recent article on – An Enterprise Artificial Intelligence Stock, we looked at the sort of business applications being built to generate insights from IoT connectivity. Before you can start to generate these insights, you need to connect to all the endpoints securely. TeamViewer has identified endpoint connectivity as a business-critical application that will drive growth going forward along with digital transformation and robotics & automation. (All numbers provided hereon will be in USD unless explicitly stated otherwise.)

Credit: TeamViewer Investor Deck

Over the years, TeamViewer has moved from being an IT tool to becoming a connectivity platform. Since the company reports revenues as a single segment of 100% subscription revenues, we don’t have any insights into how much progress they’re making in the area of IoT connectivity. What we can glean from their investor deck is that connectivity is expected to be their largest area of focus going forward.

Credit: TeamViewer Investor Deck

This is a good segue into talking about another area of disruptive technology that TeamViewer is dabbling in.

TeamViewer as an Augmented Reality Stock

The smallest of TeamViewer’s three segments, Interact, includes something that’s been equally elusive when it comes to finding investment opportunities for retail investors. So far, augmented reality has been long on ideas and short on execution. There have been some exceptions, such as German startup Ubimax which developed a software suite for augmented reality. For example, the startup was helping BMW engineers by projecting step-by-step technical bulletins and schematic drawings onto the display inside their AR-enabled glasses.

This past summer, TeamViewer acquired Ubimax for a total consideration of around $162 million. At that time, Ubimax had 200 enterprise customers and an estimated $10.8 million in revenues for the year prior to the acquisition. That’s a very small number when compared to TeamViewer’s 2019 revenues of around $463 million, but presumably, it will grow quickly.

Some examples of contracts Ubimax won last quarter that exceeded six figures in value were:

  • Logistics – Vision picking with smart glasses for hands-free and paperless processes
  • Industrials – AR worker guidance for manufacturing, maintenance, and logistics
  • Household Products – AR remote support for workflow guidance

There’s a lot to glean from TeamViewer’s investor decks, but by now we have enough information to make our decision.

TeamViewer Stock – To Buy or Not

We’re now wrapping up several months’ worth of research that’s gone into figuring out what IoT stocks, if any, we wish to hold in The Nanalyze Disruptive Tech Portfolio. McKinsey tells us the two areas we can expect the most growth in are enablement platforms and business applications. We would invest in TeamViewer on the assumption that connectivity will be a dominant part of their business going forward, though we will have limited insights into the progress they’re making in each of the three segments – Connect, Manage, and Interact.

Each quarterly earnings report for TeamViewer is accompanied by a deck full of numbers to peruse. Since this is a 100% subscription business, we can keep things simple and look at three metrics to measure progress (numbers in italics taken from Q3 2020 Results):

  • Total number of subscribers (567,000) – Since this is a fremium business model, the total number of subs shows usage and potential leads that will be converted in later stages of the sales funnel.
  • Subscribers with Annual Contract Value above €10k (1,658) – Enterprise customers who are actually paying TeamViewer a meaningful amount of money every year
  • Net retention rate (104%) – This metric shows that on average, customers are spending more with TeamViewer over time.

By monitoring the above numbers, we can ensure TeamViewer’s subscription business is growing at a healthy rate. They also provide additional granularity by geography to show the health of their business by region.


TeamViewer is able to benefit from the long-term IoT connectivity thesis and the short-term pandemic thesis without suffering from any of the hype. When we buy shares of any stock, we like them to be as cheap as possible and free from any sort of Robinhood weekday warrior momentum.

TeamViewer ticks all the boxes when it comes to a business with growing diversified revenue streams by geography and client type. Throw in the added Euro exposure you get by buying shares on Xetra, and there’s little not to like about this lesser-known German IoT stock.

Did we like TeamViewer enough to include them in the Nanalyze Disruptive Tech Portfolio? Become a Nanalyze Premium annual subscriber to find out.

6 thoughts on “TeamViewer – A German Internet of Things Stock
    1. Cheers for that Stan. We always prefer to buy foreign stocks on foreign exchanges to enjoy currency diversification benefits.

  1. Another IoT stock (UK): Telit Communications – TCM.L

    Telit Communications PLC (Telit) is a United Kingdom-based enabler of machine-to-machine (M2M) communications providing cellular, short range and positioning modules via its brand Telit Wireless Solutions. The Company develops and markets cellular, global navigation satellite system (GNSS), short-to-long range wireless modules plus mobile connectivity services and application enablement platform to onboard edge devices to the Internet of Things (IoT).

    Maybe you would like to have a look at it ?

    1. Cheers for that Stan. Readers often point out foreign stocks flying under the radar. This one is a bit on the small side – 380 million market cap USD – and 2019/2020 revenues are trending in the wrong direction. We have a metric ton of stocks to write about at the moment, so we’ll let this one slide, but don’t hesitate to raise such names.

    1. Great to have you on board Robert! We bend over backwards for our subscribers because they keep us fed and clothed.

      Funny you should mention that because Mynaric is in our research queue right now! We just moved it to the front of the line so we’ll be vetting it shortly. We can’t promise we’ll do a piece on it though. They’re not really pulling in much in the form of revenues. If there is an interest from investors though (we use some tools to gauge this), then we may write about the firm regardless.

      Thank you for the (as they say in the corporate world) gentle nudge, and of course for the financial support.

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