Temenos (TEMN) AI Stock Analysis

• Market Cap: $5.12B
• Dividend Yield: 1.78%
• Average Volume (3M): 191.87K
• Price to Earnings (P/E): 23.5
• Beta (1Y): 0.35
• Revenue Growth: -25.91%
• EPS Growth: 83.70%
• Country: CH
• Employees: 6,212
• Sector: Technology
• Sector Strength: 88
• Industry: Software - Application
• EPS (TTM): 0.76
• 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: 0.88
• Enterprise Value/Revenue: 4.15
• Enterprise Value/Gross Profit: 6.17
• Enterprise Value/Ebitda: 8.82
• 1Y Price Target: $72.62
• Price Target Upside: -0.31% Downside
• Rating Consensus: Hold
• Number of Analyst Covering: 6
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 76 Outperform
• Price Target: CHF86.00 ▲(18.05% Upside)

Temenos' strong financial performance and positive earnings call outlook are the primary drivers of its score. Technical indicators suggest bullish momentum, though the stock is overbought. The high valuation and potential risks from large deal dependencies and past customer loss slightly temper the overall score.

Positive Factors

Revenue Growth

The consistent revenue growth reflects Temenos' strong market position and ability to expand its customer base, enhancing long-term financial stability.

AI Product Success

Success with AI products indicates Temenos' innovation capabilities, potentially leading to sustained competitive advantages and market differentiation.

Balance Sheet Health

A robust balance sheet with zero debt enhances financial flexibility, allowing Temenos to invest in growth opportunities and weather economic downturns.

Negative Factors

Dependence on Large Deals

Dependence on large deals introduces volatility and risk to revenue streams, potentially impacting financial performance if deals are delayed or lost.

Operational Cost Concerns

Rising operational costs could pressure margins, affecting profitability and limiting the ability to invest in growth and innovation over time.

Impact from Customer Loss

Ongoing impact from customer loss highlights potential vulnerabilities in client relationships, which could affect revenue stability and growth prospects.

Temenos Business Overview & Revenue Model

Company Description

Temenos AG (TEMN) is a global leader in banking software, providing technology solutions to banks and financial institutions across various sectors. Founded in 1993 and headquartered in Geneva, Switzerland, Temenos specializes in offering core banking systems, digital banking platforms, and payment solutions. The company's software is designed to enhance operational efficiency, drive innovation, and improve customer experience for its clients, which include retail banks, wealth managers, and credit unions.

How the Company Makes Money

Temenos generates revenue primarily through software licensing, subscription services, and professional services. Its core revenue streams include the sale of licenses for its banking software, which can be deployed on-premises or via the cloud, allowing clients flexibility in their IT infrastructure. The company also earns significant income from subscription fees for its Software-as-a-Service (SaaS) offerings, which provide clients with ongoing access to its technology and updates. Additionally, Temenos offers professional services such as consulting, implementation, and support, contributing to its revenue. Strategic partnerships with cloud providers and financial institutions further enhance its market reach and capabilities, driving additional revenue growth.

Temenos Financial Statement Overview

Summary

Temenos exhibits strong financial health with consistent revenue growth, solid profitability margins, and a robust balance sheet with zero debt. Effective cash flow management enhances liquidity, though increasing operational costs are a concern.

Income Statement

Temenos demonstrates strong revenue growth with a 4.6% increase over the past year and robust gross and net profit margins of 65.6% and 16.6% respectively in the TTM. The EBIT and EBITDA margins are also healthy at 21.5% and 33.2%, indicating efficient cost management. However, there is a slight decline in EBIT margin from the previous year, which suggests potential increasing operational costs.

Balance Sheet

Temenos maintains a strong balance sheet with zero debt in the latest TTM, a significant improvement from prior years. The equity ratio stands at 29.5%, reflecting a solid capital structure. The return on equity (ROE) is impressive at 25.5% in the TTM, highlighting effective use of shareholder funds. The consistent decrease in liabilities and increase in equity over the years further strengthens the financial stability.

Cash Flow

The company displays a commendable 2.1% growth in free cash flow, demonstrating effective cash management. With a high operating cash flow to net income ratio of 2.12, and a free cash flow to net income ratio of 1.67, Temenos effectively converts its earnings into cash. The robust cash flow metrics ensure strong liquidity, though the decrease in investing cash flow indicates potential higher capital expenditures or investments.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	1.08B	1.04B	1.00B	949.63M	967.00M	887.36M
Gross Profit	728.62M	752.41M	709.09M	631.20M	641.52M	588.11M
EBITDA	509.56M	362.34M	224.19M	309.54M	384.98M	382.63M
Net Income	301.59M	177.18M	134.68M	114.42M	173.37M	175.02M
Balance Sheet
Total Assets	2.39B	2.28B	2.33B	2.23B	2.23B	2.22B
Cash, Cash Equivalents and Short-Term Investments	370.03M	170.30M	176.67M	125.03M	146.08M	119.32M
Total Debt	0.00	726.72M	764.68M	840.80M	959.86M	977.86M
Total Liabilities	1.85B	1.64B	1.64B	1.68B	1.76B	1.69B
Stockholders Equity	533.72M	638.97M	681.98M	578.38M	474.79M	523.40M
Cash Flow
Free Cash Flow	273.22M	284.87M	242.45M	192.88M	358.01M	296.88M
Operating Cash Flow	348.57M	363.35M	331.03M	297.91M	460.13M	382.96M
Investing Cash Flow	227.89M	-71.18M	-84.19M	-137.12M	-131.53M	-47.74M
Financing Cash Flow	-485.60M	-279.25M	-235.62M	-207.97M	-295.96M	-381.29M

Temenos Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 72.85
• 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 CH:TEMN, the sentiment is Positive. The current price of 72.85 is below the 20-day moving average (MA) of 72.97, above the 50-day MA of 68.35, and above the 200-day MA of 65.99, indicating a neutral trend. The MACD of 0.80 indicates Positive momentum. The RSI at 56.80 is Neutral, neither overbought nor oversold. The STOCH value of 70.51 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
TEMN	76 Outperform	$5.12B	23.50	55.30%	1.78%	-25.91%	83.70%
IFCN	69 Neutral	CHF2.33B	25.79	―	2.09%	-0.84%	-8.41%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
SWON	60 Neutral	CHF1.75B	-64.13	―	3.37%	-5.87%	-224.75%
UBXN	58 Neutral	$1.02B	-8.98	-20.37%	―	-27.51%	-36.15%
AMS	49 Neutral	$751.33M	―	-14.27%	―	-5.48%	79.75%
LEHN	45 Neutral	$495.08M	58.99	5.19%	―	-11.90%	-78.34%

Temenos Corporate Events

Temenos Reports Strong Q3 2025 Results, Raises Guidance

Temenos AG is a global leader in banking technology, offering a comprehensive suite of core banking and modular solutions that modernize the banking industry through AI-enhanced experiences, catering to banks of all sizes with flexible deployment options.