Temenos (TEMN) AI Stock Analysis

• Market Cap: CHF4.33B
• Dividend Yield: 1.64%
• Average Volume (3M): 191.87K
• Price to Earnings (P/E): 19.9
• Beta (1Y): 0.50
• Revenue Growth: -25.91%
• EPS Growth: 83.70%
• Country: CH
• Employees: 6,212
• Sector: Technology
• Sector Strength: 88
• Industry: Software - Application
• EPS (TTM): 1.02
• Shares Outstanding: 71,907,150
• 10 Day Avg. Volume: 137,839
• 30 Day Avg. Volume: 191,865
• PEG Ratio: 0.91
• Price to Book (P/B): 7.96
• Price to Sales (P/S): 4.87
• P/FCF Ratio: 17.84
• 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: CHF71.16
• Price Target Upside: 10.84% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 7
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 66 Neutral
• Price Target: CHF69.00 ▲(7.48% Upside)
• Action: Downgraded Date: 02/04/26
• Date: Action: Downgraded 02/04/26

The score is driven by strong profitability/cash flow and a constructive earnings outlook with raised guidance, but is held back by a clearly bearish technical setup (well below major moving averages with negative MACD) and balance-sheet leverage risk.

Positive Factors

Strong profitability & free cash flow

High margins and materially improving free cash flow provide durable financial flexibility. Consistent FCF growth and strong FCF-to-income conversion support reinvestment in product, M&A optionality, and the capacity to service debt or return capital, reducing execution risk over the medium term.

Recurring SaaS model & raised subscription guidance

A transition to recurring SaaS and explicit guidance for subscription growth increases revenue visibility and customer lifetime value. Recurring streams underpin predictable cashflow, enable better margin leverage over time, and make revenue less cyclical versus one‑time license sales.

AI product traction and geographic expansion

Successful AI-powered product rollouts combined with meaningful new deals across Middle East, ASEAN and LatAm strengthen competitive positioning. Product innovation tied to global cloud deals enhances stickiness, diversifies end markets and supports sustainable secular demand for digital banking platforms.

Negative Factors

Elevated financial leverage

A high debt-to-equity ratio meaningfully constrains financial flexibility and raises refinancing and interest-rate exposure. If revenue or deal timing falters, leverage can limit capital allocation choices, increase cost of capital, and pressure margins or investment plans over the medium term.

Recent revenue decline

A negative trailing revenue trend tempers confidence in topline momentum; sustaining margins depends on restoring consistent sales growth. Revenue decline may signal pricing pressure, client churn, or slower new account adds—risks that could persist absent durable expansion in recurring SaaS bookings.

Reliance on large deals and customer concentration

Concentration on a few sizable deals creates execution risk and quarter-to-quarter volatility; failure to close can impair guidance. The lingering impact from a lost BNPL customer highlights client concentration and churn vulnerability, which can undermine predictable recurring revenue growth.

Temenos Business Overview & Revenue Model

Company Description

Temenos AG develops, markets, and sells integrated banking software systems to banking and other financial institutions worldwide. The company provides Temenos Transact, a banking solution that offers banking software, and data and analytics; and Temenos Payments, a payment solution that gives banks real-time control, customer service experience, and cost efficiencies and risk management solutions. It also offers Temenos Infinity, a digital banking product; Temenos Multifonds, a fund administration solution; Temenos SaaS solution that supports banks in various sectors and geographies; Temenos Quantum, a multi-experience development platform that delivers digital transformation; and Temenos AI that provides frictionless customer experiences and automate processes. In addition, the company provides Temenos Financial Crime Mitigation that allows banks and financial institutions to avoid regulatory fines, detect fraud, and mitigate reputational risks; Temenos Analytics, a reporting, analytics, and business intelligence product; and Temenos Regulatory Compliance, which is used to address fraud, remain compliant with regulations, and manage risk. Further, it offers retail and private banking, corporate and business banking, Islamic banking, wealth management, financial inclusion, mobile banking, consultancy and training services, and support services. Additionally, the company provides Temenos Developer Community, an open API catalogue that brings standardized out-of-the-box APIs to fast track innovation with online support and resources. The company was formerly known as Temenos Group AG and changed its name to Temenos AG in May 2018. Temenos AG was founded in 1993 and is headquartered in Geneva, Switzerland.

How the Company Makes Money

Temenos generates revenue primarily through the licensing of its software products, which includes both upfront license fees and subscription-based models. The company offers its solutions on a SaaS (Software as a Service) basis, allowing clients to pay for services based on usage, which provides a recurring revenue stream. Additionally, Temenos earns money from implementation services, consulting, and support services that accompany the deployment of its software. Strategic partnerships with major technology firms and financial institutions also contribute to revenue growth by expanding its market reach and enhancing its product offerings.

Temenos Financial Statement Overview

Summary

Strong profitability and cash generation (TTM net margin 29.35%, EBIT margin 36.78%, FCF growth 51.41%, FCF-to-net income 0.88) support a solid score, but negative TTM revenue growth (-3.69%) and elevated leverage (debt-to-equity 2.04) temper it.

Income Statement

Temenos shows strong profitability with a high net profit margin of 29.35% in the TTM period, indicating effective cost management. However, the revenue growth rate is negative at -3.69%, suggesting a decline in sales. The EBIT and EBITDA margins are robust at 36.78% and 47.99% respectively, reflecting operational efficiency.

Balance Sheet

The company has a high debt-to-equity ratio of 2.04 in the TTM period, indicating significant leverage which could pose financial risk. However, the return on equity is impressive at 50.21%, showcasing strong profitability relative to shareholder equity. The equity ratio is moderate, suggesting a balanced asset structure.

Cash Flow

Temenos demonstrates strong cash flow performance with a free cash flow growth rate of 51.41% in the TTM period, indicating improved cash generation. The operating cash flow to net income ratio is 0.52, showing a healthy conversion of income to cash. The free cash flow to net income ratio is high at 0.88, reflecting efficient cash management.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	1.10B	1.04B	1.00B	949.63M	967.00M	887.36M
Gross Profit	741.30M	752.41M	709.09M	631.20M	641.52M	588.11M
EBITDA	519.03M	362.34M	224.19M	309.54M	384.98M	382.63M
Net Income	315.38M	177.18M	134.68M	114.42M	173.37M	175.02M
Balance Sheet
Total Assets	2.25B	2.28B	2.33B	2.23B	2.23B	2.22B
Cash, Cash Equivalents and Short-Term Investments	184.25M	170.30M	176.67M	125.03M	146.08M	119.32M
Total Debt	886.00M	726.72M	764.68M	840.80M	959.86M	977.86M
Total Liabilities	1.81B	1.64B	1.64B	1.68B	1.76B	1.69B
Stockholders Equity	434.28M	638.97M	681.98M	578.38M	474.79M	523.40M
Cash Flow
Free Cash Flow	455.39M	284.87M	242.45M	192.88M	358.01M	296.88M
Operating Cash Flow	512.42M	363.35M	331.03M	297.91M	460.13M	382.96M
Investing Cash Flow	205.25M	-71.18M	-84.19M	-137.12M	-131.53M	-47.74M
Financing Cash Flow	-659.78M	-279.25M	-235.62M	-207.97M	-295.96M	-381.29M

Temenos Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 64.20
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For CH:TEMN, the sentiment is Negative. The current price of 64.2 is below the 20-day moving average (MA) of 65.83, below the 50-day MA of 73.31, and below the 200-day MA of 67.91, indicating a bearish trend. The MACD of -2.69 indicates Negative momentum. The RSI at 38.27 is Neutral, neither overbought nor oversold. The STOCH value of 34.14 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for CH:TEMN.

Temenos Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
IFCN	75 Outperform	CHF2.97B	32.92	―	2.14%	-0.84%	-8.41%
TEMN	66 Neutral	CHF4.33B	19.86	55.30%	1.64%	-25.91%	83.70%
SWON	63 Neutral	CHF1.43B	-52.72	―	3.40%	-5.87%	-224.75%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
UBXN	58 Neutral	CHF1.02B	-8.98	-20.37%	―	-27.51%	-36.15%
LEHN	54 Neutral	$364.62M	53.78	5.19%	―	-11.90%	-78.34%
AMS	44 Neutral	CHF868.06M	-7.03	-14.27%	―	-5.48%	79.75%