Temenos (CH:TEMN)
:TEMN
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Temenos
(TEMN)
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Rating:76Outperform
Price Target:
CHF91.00
▲(15.41% Upside)
Action:UpgradedDate:04/23/26
The score is driven primarily by strong profitability and free-cash-flow generation, supported by bullish technical trend and positive guidance with raised longer-term targets. Offsetting factors are higher leverage/declining equity and a valuation that is reasonable but not clearly discounted, plus a near-term BNPL-related headwind embedded in 2026 guidance.
Positive Factors
High profitability and margins
Sustained very high gross and EBIT margins indicate durable product differentiation and pricing power in core banking software. Strong margins support reinvestment in R&D, allow funding of buybacks/dividends, and provide resilience to cyclical revenue swings over the next 2–6 months.
Negative Factors
Elevated leverage and reduced equity
Higher leverage and declining equity reduce balance-sheet flexibility and raise refinancing and covenant risks. Even with strong returns, elevated net debt amplifies downside in stress scenarios, constrains optionality for opportunistic M&A or larger investment outlays in the medium term.
Read all positive and negative factors
Positive Factors
Negative Factors
High profitability and margins
Sustained very high gross and EBIT margins indicate durable product differentiation and pricing power in core banking software. Strong margins support reinvestment in R&D, allow funding of buybacks/dividends, and provide resilience to cyclical revenue swings over the next 2–6 months.
Read all positive factors
Temenos (TEMN) vs. iShares MSCI Switzerland ETF (EWL)
Market Cap
CHF5.06B
Dividend Yield1.64%
Average Volume (3M)191.87K
Price to Earnings (P/E)36.5
Beta (1Y)0.47
Revenue Growth34.09%
EPS Growth111.52%
CountryCH
Employees6,212
SectorTechnology
Sector Strength88
IndustrySoftware - Application
Share Statistics
EPS (TTM)4.20
Shares Outstanding71,907,150
10 Day Avg. Volume137,839
30 Day Avg. Volume191,865
Financial Highlights & Ratios
PEG Ratio0.32
Price to Book (P/B)14.52
Price to Sales (P/S)6.07
P/FCF Ratio19.87
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
CHF84.56Price Target Upside7.24% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering8
EPS Forecast (FY)4.49
Revenue Forecast (FY)CHF1.17B
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 ...
How the Company Makes Money
Temenos makes money primarily by selling banking software and associated services to financial institutions. Key revenue streams typically include: (1) Software revenue, generated from licensing its banking software products/platforms to customers...
Temenos Earnings Call Summary
Earnings Call Date:Feb 24, 2026
(Q1-2026)
| % Change Since: |
Next Earnings Date:Jul 22, 2026
Earnings Call Sentiment Positive
The call emphasized strong recurring revenue growth (ARR +13%), above‑market product revenue (+14%), robust profitability expansion (EBIT & EPS +20%), healthy free cash flow (+22%) and confirmed guidance/2028 targets. Key operational achievements include notable regional wins (Middle East & Africa), U.S. pipeline progress, AI product momentum and senior hires including a new CFO. Principal negatives were the one‑off BNPL termination headwind, a U.S. performance that is not yet translating into signed large deals, increased investment and R&D spend, and unchanged prudent guidance due to macro/geopolitical uncertainties. Overall, the positive financial and operational metrics and reconfirmed targets materially outweigh the manageable headwinds and uncertainties discussed.Positive Updates
Strong ARR and Recurring Revenue Growth
ARR reached $860 million with ARR growth of 13% year‑on‑year, providing strong visibility on future recurring revenue and cash flow.
Negative Updates
BNPL Client Termination Headwind
A BNPL client moved off the platform at the end of last year, creating a one‑off headwind reflected in results and guidance; management says no further headwind beyond 2026.
Read all updates
Q1-2026 Updates
Positive
Negative
Strong ARR and Recurring Revenue Growth
ARR reached $860 million with ARR growth of 13% year‑on‑year, providing strong visibility on future recurring revenue and cash flow.
Read all positive updates
Company Guidance
Management reconfirmed its 2026 non‑IFRS, constant‑currency guidance (EPS and free cash flow reported) and reiterated 2028 targets, noting Q1 metrics that underpin that view: ARR $860m (ARR +13%), product revenue +14%, subscription & SaaS +12% in Q1 (full‑year subscription/SaaS guidance ~9%), maintenance +15% in Q1 with full‑year maintenance guidance 7–8% (longer‑term maintenance ~5–6%), total revenue +13% in Q1, non‑IFRS EBIT and EPS +20% in Q1, EBIT margin +190bps to 32.7%, net profit +19%, EPS +20%, free cash flow $60m in Q1 (+22% YoY) and a raised 2028 FCF target; the plan funds $28–35m of incremental investments (partly offset by ~ $10m of cost efficiencies), pro forma R&D +14% YoY, generated $204m operating cash, ended the quarter with net debt $609m and leverage 1.3x (target 1.0–1.5x), completed a CHF100m buyback in April (after a CHF250m buyback in Aug‑2025), and said the guidance already reflects the one‑off BNPL headwind with no further impact beyond 2026.Temenos Financial Statement Overview
Summary
Income Statement
82
Very Positive
Balance Sheet
60
Neutral
Cash Flow
77
Positive
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 1.11B | 1.14B | 1.04B | 1.00B | 949.63M | 967.00M |
| Gross Profit | 823.54M | 839.42M | 752.41M | 709.09M | 631.20M | 641.52M |
| EBITDA | 656.46M | 640.22M | 362.34M | 224.19M | 309.54M | 384.98M |
| Net Income | 291.93M | 293.96M | 177.18M | 134.68M | 114.42M | 173.37M |
Balance Sheet | ||||||
| Total Assets | 2.19B | 2.25B | 2.28B | 2.33B | 2.23B | 2.23B |
| Cash, Cash Equivalents and Short-Term Investments | 136.67M | 203.40M | 170.30M | 176.67M | 125.03M | 146.08M |
| Total Debt | 783.97M | 808.42M | 726.72M | 764.68M | 840.80M | 959.86M |
| Total Liabilities | 1.77B | 1.77B | 1.64B | 1.64B | 1.68B | 1.76B |
| Stockholders Equity | 415.02M | 477.66M | 638.97M | 681.98M | 578.38M | 474.79M |
Cash Flow | ||||||
| Free Cash Flow | 456.10M | 349.05M | 284.87M | 242.45M | 192.88M | 358.01M |
| Operating Cash Flow | 510.73M | 354.33M | 363.35M | 331.03M | 297.91M | 460.13M |
| Investing Cash Flow | 204.31M | 228.49M | -71.18M | -84.19M | -137.12M | -131.53M |
| Financing Cash Flow | -733.83M | -511.44M | -279.25M | -235.62M | -207.97M | -295.96M |
Temenos Technical Analysis
Positive
78.85
Price Trends
70.41
Positive
72.96
Positive
69.99
Positive
Market Momentum
1.18
Negative
66.64
Neutral
93.98
Negative
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 78.85 is above the 20-day moving average (MA) of 71.65, above the 50-day MA of 70.41, and above the 200-day MA of 69.99, indicating a bullish trend. The MACD of 1.18 indicates Negative momentum. The RSI at 66.64 is Neutral, neither overbought nor oversold. The STOCH value of 93.98 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for CH:TEMN.
Temenos Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
76 Outperform | CHF5.06B | 36.50 | 55.08% | 1.64% | 34.09% | 111.52% | |
74 Outperform | CHF3.64B | 17.74 | ― | 2.14% | -5.34% | -28.13% | |
61 Neutral | $37.18B | 12.37 | -10.20% | 1.83% | 8.50% | -7.62% | |
61 Neutral | CHF1.54B | -38.27 | ― | 3.40% | 22.24% | ― | |
52 Neutral | CHF1.02B | -4.01 | -20.37% | ― | -27.51% | -36.15% | |
50 Neutral | CHF341.83M | 20.05 | 5.15% | ― | -11.90% | -78.34% | |
47 Neutral | CHF1.23B | -10.54 | -12.96% | ― | -4.67% | 83.73% |
* Technology Sector Average
CH:TEMN
Temenos
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16.10
27.33%
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Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.