Chandramouli Sriraman, an analyst from Stifel Nicolaus, maintained the Buy rating on Temenos (TMNSF – Research Report). The associated price target remains the same with CHF90.00.
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Chandramouli Sriraman has given his Buy rating due to a combination of factors, primarily driven by Temenos’s solid financial performance and strategic outlook. The company’s 4Q24 results aligned with previous expectations, showcasing an 8% increase in revenue, bolstered by a strong 12% growth in licenses and subscriptions. This revenue growth, coupled with a robust EBIT margin of 37.6%, highlights Temenos’s operational efficiency. Additionally, the free cash flow remained strong, supported by the transition to a subscription-based model and successful up-selling efforts.
Looking ahead, Temenos’s conservative FY25 guidance provides a promising outlook with expected ARR growth of over 12% and a notable increase in free cash flow by at least 12%. Despite the divestiture of Multifonds, the company maintains a stable growth trajectory, which is anticipated to continue. These factors, along with a stable sales environment and strategic hiring in key markets, underpin Sriraman’s confidence in maintaining a Buy rating for Temenos’s stock.
In another report released yesterday, Jefferies also maintained a Buy rating on the stock with a CHF72.00 price target.