Service Stream Limited (SSM) AI Stock Analysis

• Market Cap: €1.16B
• Dividend Yield: 2.93%
• Average Volume (3M): 1.71M
• Price to Earnings (P/E): 21.9
• Beta (1Y): 0.24
• Revenue Growth: 6.66%
• EPS Growth: 124.87%
• Country: AU
• Employees: 5,300
• Sector: Industrials
• Sector Strength: 90
• Industry: Engineering & Construction
• EPS (TTM): 0.06
• Shares Outstanding: 615,953,060
• 10 Day Avg. Volume: 1,959,801
• 30 Day Avg. Volume: 1,705,850
• PEG Ratio: 0.37
• Price to Book (P/B): 2.41
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 10.54
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: €1.97
• Price Target Upside: 3.80% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 3

• Rating: 67 Neutral
• Price Target: ―

Service Stream Limited scores well due to its strong revenue growth and effective cash flow management. However, profitability margins and return on equity remain areas for improvement. The stock shows a positive technical trend but lacks comprehensive momentum indicators. The relatively high P/E ratio suggests potential overvaluation, offset partially by a reasonable dividend yield. Overall, the company's strengths in financial performance drive the score, with technical analysis and valuation providing mixed signals.

Service Stream Limited Business Overview & Revenue Model

Company Description

Service Stream Limited designs, constructs, operates and maintains infrastructure networks in Australia. It operates through: Telecommunications, Utilities, and Transport segments. The Telecommunications segment provides various operations, maintenance, installation, design, and construction services to owners of fixed-line and wireless telecommunication networks, including customer connections; service and network assurance; site acquisition; and design, construction, engineering, and installation of broadband, wireless, and fixed-line project services, as well as projects for asset remediation, augmentation, and relocation. The Utilities segment offers operations, maintenance, design, and construction services, as well as range of specialist metering, new energy, and inspection services to gas, water, and electricity network owners and other customers. Its services include asset upgrades and replacement; design, engineering, and construction services for network assets and energy-related products; and meter reading and network assurance, as well as specialist inspection, auditing, and compliance services. The Transport segment provides operational support and maintenance services to public and private road, and tunnel asset owners. Its services comprising road network maintenance, control room operations, minor civil construction services, and installation and operation of intelligent transport systems. The company was incorporated in 1996 and is headquartered in Melbourne, Australia.

How the Company Makes Money

Service Stream Limited generates revenue primarily through contracts and service agreements with major organizations across telecommunications, utilities, and transport sectors. The company's revenue model is built on providing comprehensive infrastructure services, including network design, construction, maintenance, and asset management. Key revenue streams include long-term maintenance contracts, project delivery services, and network assurance services. Significant partnerships with leading industry players, such as telecommunications companies and utility providers, contribute to its earnings by ensuring a steady flow of projects and recurring service agreements. The company's ability to deliver cost-effective and reliable solutions is a critical factor in securing and retaining these contracts.

Service Stream Limited Financial Statement Overview

Summary

Service Stream Limited demonstrates solid financial health with notable revenue growth and effective cash flow management. While the balance sheet is stable with low leverage, the company could improve profitability margins and return on equity to enhance overall financial performance. Continued focus on operational efficiency and cash flow generation will be key to sustaining growth and improving shareholder value.

Income Statement

Service Stream Limited has demonstrated solid revenue growth, increasing from 1.51 billion in 2022 to 2.29 billion in 2024, showcasing a strong upward trajectory. The gross profit margin has improved significantly over the years, with a current margin of 94.2%, indicating efficient cost management. However, net profit margins remain modest at 1.41%, suggesting room for improvement in profitability. EBIT and EBITDA margins are reasonable at 2.28% and 4.92% respectively, but there's potential to enhance operational efficiency.

Balance Sheet

Service Stream Limited maintains a stable equity position with an equity ratio of 45.8%, reflecting a strong balance between debt and equity financing. The debt-to-equity ratio is relatively low at 0.24, indicating prudent leverage management. However, the return on equity is modest at 6.73%, suggesting that the company could improve its utilization of equity to generate higher returns.

Cash Flow

The company shows robust cash flow management with a healthy free cash flow of 86.71 million in 2024. The operating cash flow to net income ratio is strong at 3.01, indicating efficient conversion of earnings into cash. Free cash flow to net income is also favorable at 2.69. Despite these strengths, a slight decline in free cash flow growth rate from the prior year indicates potential challenges in sustaining cash flow growth.

Breakdown
TTM	Jun 2024	Jun 2023	Jun 2022	Jun 2021	Jun 2020
Income Statement		Total Revenue
2.38B	2.29B	2.05B	1.51B	803.01M	927.95M
	Gross Profit
917.20M	2.16B	96.14M	59.26M	78.66M	108.39M
	EBIT
236.86M	52.16M	32.48M	34.82M	52.55M	80.11M
	EBITDA
94.89M	112.65M	100.53M	24.31M	75.19M	105.56M
	Net Income Common Stockholders
52.62M	32.30M	4.46M	-36.32M	29.27M	49.31M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
55.43M	62.95M	84.27M	68.68M	50.57M	79.47M
	Total Assets
1.03B	1.05B	1.09B	1.05B	547.43M	588.68M
	Total Debt
71.22M	117.02M	171.86M	206.37M	67.50M	93.36M
	Net Debt
15.79M	54.07M	87.59M	137.69M	16.92M	13.89M
	Total Liabilities
536.53M	568.27M	625.75M	581.56M	224.09M	266.88M
	Stockholders Equity
495.89M	480.29M	465.36M	468.10M	323.33M	321.80M
Cash Flow		Free Cash Flow
111.31M	86.71M	86.83M	53.17M	35.65M	49.86M
	Operating Cash Flow
121.23M	97.19M	94.81M	58.55M	45.55M	57.68M
	Investing Cash Flow
-6.88M	-6.38M	-16.91M	-317.74M	-8.84M	-6.49M
	Financing Cash Flow
-132.23M	-112.12M	-62.31M	277.30M	-65.61M	-42.53M

Service Stream Limited Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 1.90
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For AU:SSM, the sentiment is Positive. The current price of 1.9 is above the 20-day moving average (MA) of 1.88, above the 50-day MA of 1.80, and above the 200-day MA of 1.59, indicating a bullish trend. The MACD of 0.03 indicates Positive momentum. The RSI at 57.87 is Neutral, neither overbought nor oversold. The STOCH value of 38.89 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for AU:SSM.

Service Stream Limited Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
SSM	67 Neutral	€1.16B	21.94	10.90%	2.93%	6.66%	124.87%
Sector *	64 Neutral	$4.39B	11.81	5.17%	249.38%	3.98%	-12.17%
DNE		€2.33B	50.90	3.35%	3.93%	―	―
WYGPF		$4.40B	18.77	6.85%	3.70%	―	―
3NR		€724.68M	10.59	18.01%	5.98%	―	―
ASL		AU$150.84M	―	-75.74%	―	―	―

Service Stream Limited Corporate Events

TIGA Trading Pty Ltd Ceases to be Substantial Holder in Service Stream Limited

Service Stream Limited, a company listed on the ASX, has announced that TIGA Trading Pty Ltd has ceased to be a substantial holder of its shares as of April 30, 2025. This change in substantial holding, reported in accordance with the Corporations Act, involved multiple market sales of ordinary shares by TIGA Trading Pty Ltd and associated entities, impacting the voting securities of Service Stream Limited.

Thorney Opportunities Ltd Reduces Stake in Service Stream Limited

Thorney Opportunities Ltd has announced that it has ceased to be a substantial holder in Service Stream Limited, a company listed on the Australian Securities Exchange. The change in holding was due to a series of market sales conducted by Thorney Opportunities Ltd and its associates, including TIGA Trading Pty Ltd and Jasforce Pty Ltd, between April 22 and April 30, 2025. This development might affect the company’s influence in Service Stream Limited and could have implications for other stakeholders in terms of voting power and market perception.

Allan Gray Australia Ceases Substantial Holding in Service Stream Limited

Allan Gray Australia Pty Ltd has ceased to be a substantial holder in Service Stream Limited as of April 24, 2025. This change in substantial holding could impact the company’s shareholder dynamics and influence its market position, as substantial holders often play a significant role in corporate governance and strategic decision-making.

Change in Substantial Holding for Service Stream Limited

Service Stream Limited has announced that Australian Retirement Trust Pty LTD has ceased to be a substantial holder in the company as of April 22, 2025. This change in substantial holding could potentially impact the company’s shareholder structure and influence its market positioning, as substantial holders often play a significant role in corporate governance and strategic decision-making.

Mitsubishi UFJ Financial Group Becomes Substantial Holder in Service Stream

Mitsubishi UFJ Financial Group, Inc. has become a substantial holder in Service Stream Limited, acquiring a significant voting power of 5.06% through various fully paid ordinary shares. This development indicates Mitsubishi UFJ’s strategic interest in Service Stream, potentially impacting the company’s governance and future strategic decisions, while also reflecting the financial group’s broader investment strategy.

Service Stream Limited’s Substantial Holder Reduces Stake

Service Stream Limited, a company listed on the ASX, has experienced a change in the interests of its substantial holder, TIGA Trading Pty Ltd, and associated entities. The notice indicates a reduction in voting power from 6.22% to 5.15%, following a series of market sales of ordinary shares by various entities within the Thorney Investment Group. This change in shareholding could impact the company’s governance dynamics and influence over strategic decisions, potentially affecting stakeholders’ interests.

Thorney Opportunities Reduces Stake in Service Stream Limited

Thorney Opportunities Ltd has decreased its stake in Service Stream Limited, a company listed on the Australian Securities Exchange (ASX) under the ticker SSM. The change in substantial holding was reported through a Form 604 notice, indicating a reduction in voting power from 6.22% to 5.15%. This reduction reflects a series of market sales by various entities associated with Thorney Opportunities Ltd, including TIGA Trading Pty Ltd and the Waislitz Family Foundation, among others. The impact of this change may affect the company’s shareholder dynamics and could influence investor perception.

Allan Gray Australia Reduces Stake in Service Stream Limited

Service Stream Limited has announced a change in the substantial holding of its shares by Allan Gray Australia Pty Ltd. The investment manager’s voting power in Service Stream Limited has decreased from 6.83% to 5.59% as of April 1, 2025. This reduction in voting power could impact the influence Allan Gray Australia has over the company’s decisions and may affect stakeholder perceptions regarding the company’s market stability and investor confidence.

Australian Retirement Trust Becomes Substantial Holder in Service Stream Limited

Service Stream Limited has announced that Australian Retirement Trust Pty Ltd, acting as a trustee for a superannuation fund, has become a substantial holder in the company with a 5.215% voting power through the acquisition of 32,124,918 fully paid ordinary shares. This development signifies a notable investment in Service Stream Limited, potentially impacting its market positioning and indicating confidence from a significant institutional investor, which could influence future strategic decisions and shareholder value.

Vanguard Group Reduces Stake in Service Stream Limited

Service Stream Limited announced that The Vanguard Group, Inc. and its controlled entities have ceased to be a substantial holder in the company as of March 21, 2025. This change in shareholding reduces Vanguard’s voting power to 4.995%, potentially impacting the company’s shareholder dynamics and influencing its strategic decisions.

Service Stream Limited Announces Director’s Share Sale

Service Stream Limited has announced a change in the director’s interest, specifically involving Brett Thomas Gallagher. The change was due to the sale of 90,243 ordinary shares by JBL-G Pty Ltd, acting as trustee for the Gallagher MSA Family Trust, reducing the total shares held to 2,300,000. This transaction, valued at $160,330.17, was conducted as an on-market sale. The announcement reflects routine adjustments in shareholding by company directors, which may influence investor perceptions and the company’s stock market performance.

Vanguard Group Acquires Substantial Stake in Service Stream Limited

The Vanguard Group has become a substantial holder in Service Stream Limited, acquiring a 5.003% voting power through its various mutual funds and accounts. This acquisition signifies a significant investment by Vanguard, potentially impacting Service Stream’s market positioning and indicating confidence in the company’s future performance.

Allan Gray Reduces Stake in Service Stream Limited

Allan Gray Australia Pty Ltd, an investment manager, has reduced its voting power in Service Stream Limited from 8.59% to 6.83% as of February 28, 2025. This change in substantial holding reflects a decrease in the number of ordinary shares held, which may impact the company’s shareholder dynamics and influence within the market.

Service Stream Limited Appoints New Director with No Securities Interest

Service Stream Limited has announced the appointment of Brent Ronald Dennison as a director, effective March 3, 2025. The company has disclosed that Dennison currently holds no relevant interests in securities, either as a registered holder or through contracts, which suggests a neutral impact on the company’s operations and market positioning.

Service Stream Secures $1.9 Billion Agreement with NBN Co

Service Stream Limited has secured a significant long-term agreement with NBN Co, valued at approximately $1.9 billion over an initial five-year term. This agreement consolidates previous agreements and positions Service Stream as a key strategic partner for NBN Co across several Australian regions, although it does not guarantee work volumes. The new agreement is set to commence in September 2025, following the expiration of the existing agreements.