Temenos (TEMN) AI Stock Analysis

• Market Cap: CHF4.96B
• Dividend Yield: 1.64%
• Average Volume (3M): 191.87K
• Price to Earnings (P/E): 23.6
• Beta (1Y): 0.41
• Revenue Growth: -25.91%
• EPS Growth: 83.70%
• Country: CH
• Employees: 6,212
• Sector: Technology
• Sector Strength: 88
• Industry: Software - Application
• EPS (TTM): 1.03
• Shares Outstanding: 71,907,150
• 10 Day Avg. Volume: 137,839
• 30 Day Avg. Volume: 191,865
• PEG Ratio: 0.32
• Price to Book (P/B): 14.52
• Price to Sales (P/S): 6.07
• P/FCF Ratio: 19.87
• 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: CHF76.33
• Price Target Upside: 3.85% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 7
• EPS Forecast (FY): 4.42
• Revenue Forecast (FY): CHF1.16B

• Rating: 72 Outperform
• Price Target: CHF82.00 ▲(11.56% Upside)
• Action: Upgraded Date: 03/07/26
• Date: Action: Upgraded 03/07/26

The score is driven primarily by strong profitability improvements and constructive guidance, supported by a generally bullish technical setup. Offsetting factors include increased balance-sheet leverage, weaker recent free-cash-flow trend, and a valuation that is not obviously cheap.

Positive Factors

High and Stable Gross Margins

Sustained ~71–73% gross margins indicate a scalable software business with high incremental profitability. Such margin durability supports operating leverage, funds R&D and sales expansion, and underpins persistent earnings quality even if top-line growth moderates.

Recurring SaaS & Subscription Revenue

Growing recurring SaaS and subscription revenue increases predictability of cash flows and customer lifetime value. A multi-year shift to subscriptions supports retention, smoother revenue streams, and stronger visibility for investment planning and margin expansion.

Profitability Inflection / Operating Leverage

A sharp rise in operating and net margins reflects effective cost discipline, pricing power, and scalable delivery. Durable operating leverage enhances free cash flow potential and resilience, allowing reinvestment in product innovation and sales without proportional cost increases.

Negative Factors

Increased Financial Leverage

A meaningful rise in leverage reduces financial flexibility and raises refinancing and covenant risks if revenue or cash flow soften. Higher debt levels can constrain strategic options and increase interest expense sensitivity over a multi-quarter horizon.

Declining Free Cash Flow Trend

A 23% YoY decline in free cash flow and operating cash flow well below revenue signal timing or working-capital pressure. Less consistent cash conversion reduces runway for investment or debt paydown and weakens resilience to execution slips over coming quarters.

Concentration on Large Deals & Customer Loss

Dependence on a handful of large contract closes and the lingering effect of a lost BNPL customer create execution and revenue-concentration risk. If key deals slip or client churn continues, near-term guidance and multi-quarter revenue visibility could be impaired.

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 inflection and consistently high gross margins support earnings quality, but higher leverage and a meaningful YoY decline in free cash flow reduce financial flexibility and cash-flow reliability.

Income Statement

Revenue has grown steadily from 2023–2025 (about +4% in 2025), and profitability improved sharply in 2025 with net margin rising to ~26% (from ~17% in 2024) and operating margin expanding to ~45%. Gross margin is consistently strong (~71–73%), supporting scalable earnings. The main weakness is that top-line growth remains moderate rather than high, so results rely more on margin expansion than rapid revenue acceleration.

Balance Sheet

Returns to shareholders are very strong (return on equity ~62% in 2025), indicating efficient profit generation. However, leverage increased meaningfully in 2025: debt-to-equity moved up to ~1.69 (from ~1.14 in 2024) as equity declined, which raises balance-sheet risk and reduces flexibility if operating conditions weaken.

Cash Flow

Cash generation remains solid, with free cash flow roughly matching net income in 2025 (about 99%), which is a positive quality signal. Offsetting this, free cash flow fell materially in 2025 (down ~23% year over year) and operating cash flow remains well below annual revenue (about 31% in 2025), suggesting working-capital or timing impacts and a less consistent cash profile versus the earnings step-up.

Breakdown	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	1.14B	1.04B	1.00B	949.63M	967.00M
Gross Profit	839.42M	752.41M	709.09M	631.20M	641.52M
EBITDA	640.22M	362.34M	224.19M	309.54M	384.98M
Net Income	293.96M	177.18M	134.68M	114.42M	173.37M
Balance Sheet
Total Assets	2.25B	2.28B	2.33B	2.23B	2.23B
Cash, Cash Equivalents and Short-Term Investments	203.40M	170.30M	176.67M	125.03M	146.08M
Total Debt	808.42M	726.72M	764.68M	840.80M	959.86M
Total Liabilities	1.77B	1.64B	1.64B	1.68B	1.76B
Stockholders Equity	477.66M	638.97M	681.98M	578.38M	474.79M
Cash Flow
Free Cash Flow	349.05M	284.87M	242.45M	192.88M	358.01M
Operating Cash Flow	354.33M	363.35M	331.03M	297.91M	460.13M
Investing Cash Flow	228.49M	-71.18M	-84.19M	-137.12M	-131.53M
Financing Cash Flow	-511.44M	-279.25M	-235.62M	-207.97M	-295.96M

Temenos Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 73.50
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• 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 Positive. The current price of 73.5 is above the 20-day moving average (MA) of 72.63, above the 50-day MA of 71.37, and above the 200-day MA of 69.04, indicating a bullish trend. The MACD of 1.43 indicates Negative momentum. The RSI at 53.49 is Neutral, neither overbought nor oversold. The STOCH value of 30.63 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive 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	CHF2.63B	37.90	―	2.14%	-0.84%	-8.41%
TEMN	72 Outperform	CHF4.96B	23.59	55.08%	1.64%	-25.91%	83.70%
SWON	63 Neutral	CHF1.43B	30.36	―	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	-4.01	-20.37%	―	-27.51%	-36.15%
LEHN	50 Neutral	$319.61M	20.05	5.15%	―	-11.90%	-78.34%
AMS	44 Neutral	$781.51M	-6.44	-12.96%	―	-5.48%	79.75%