Indra Sistemas (IDR) AI Stock Analysis

• Market Cap: €8.96B
• Dividend Yield: 0.52%
• Average Volume (3M): 845.63K
• Price to Earnings (P/E): 23.3
• Beta (1Y): 0.50
• Revenue Growth: 6.92%
• EPS Growth: 57.04%
• Country: ES
• Employees: 60,598
• Sector: Technology
• Sector Strength: 88
• Industry: Information Technology Services
• EPS (TTM): 0.82
• Shares Outstanding: 176,654,400
• 10 Day Avg. Volume: 936,783
• 30 Day Avg. Volume: 845,628
• PEG Ratio: 0.31
• Price to Book (P/B): 2.31
• Price to Sales (P/S): 0.62
• P/FCF Ratio: 8.83
• 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: €64.50
• Price Target Upside: 2.79% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 4
• EPS Forecast (FY): 2.49
• Revenue Forecast (FY): €6.54B

• Rating: 63 Neutral
• Price Target: €53.00 ▼(-15.54% Downside)
• Action: Reiterated Date: 02/04/26
• Date: Action: Reiterated 02/04/26

The score is primarily driven by solid financial performance (profitability and improved leverage), partially offset by weaker cash flow trends. Technical indicators point to short-term weakness versus key moving averages, and valuation (P/E ~24.8 with ~0.5% yield) is not particularly supportive.

Positive Factors

Improved leverage and high ROE

A reduced debt-to-equity ratio of 0.70 alongside a 28.67% ROE indicates stronger capital structure and high return on shareholders' capital. This improves financial flexibility for strategic investment and buffers cyclical shocks, supporting durable operational execution over months.

Stable operational margins and slightly higher net margin

Stable EBIT/EBITDA margins and an improving net margin (6.21%) signal consistent operational efficiency and cost control. Sustained margin stability underpins cash generation potential and allows predictable reinvestment for digital and systems projects over a medium-term horizon.

Contracted, diversified revenue streams

Long-term contracts with governments and large enterprises and a presence across transport, defense, financial services and energy create recurring revenue and reduced top-line volatility. Diversified sector exposure supports steady demand and enduring backlog over 2–6 months.

Negative Factors

Declining free cash flow

A 6.36% TTM decline in free cash flow reduces internal funding for capex, R&D and potential dividends. If the trend persists, management may need to rely more on external financing or curtail investments, constraining growth initiatives and strategic flexibility.

Gross profit margin compression

A sharp drop in gross margin from 34.72% to 23.72% points to cost pressures or adverse contract mix. Persistent margin compression would reduce operating leverage and threaten sustained profitability, forcing either price recovery or efficiency measures to restore long-term margins.

Weak operating cash conversion

An OCF-to-net-income ratio of 0.23 indicates earnings are not fully converting into cash, raising concerns about earnings quality and liquidity. Over time this can limit the firm's ability to self-fund contracts, service obligations, and invest without tapping external capital.

Indra Sistemas Business Overview & Revenue Model

Company Description

Indra Sistemas, S.A. operates as a technology and consulting company worldwide. It designs, develops, produces, integrates, operates, maintains, repairs, and markets systems, solutions, and services based on the use of information technologies, electronics, and communication; and for surveillance and security control of facilities. It also researches, engineers, designs, develops, manufactures, markets, installs, maintains, and repairs devices, equipment, and systems for data communication, encryption systems, encryption, beacon, and command and control center; manages, executes, commercializes, and sells system engineering services for the defense industry; and provides engineering and maintenance services for air defense systems and other related systems, as well as architectural and engineering technical services. In addition, it offers systems to aid navigation and landing, and air traffic control systems; outsources business processes; delivers document management services and mortgage management; realizes measures for the settlement and registration; and manages digitalization and data capture. Further, it provides business consulting, technology and solutions consulting, administration, management, support, advisory, telecommunications, mobile telephony, credit card processing, and energy transport and distribution network manufacture services; engineering and consultancy services for environment, transport, construction, water, and industry areas; and digital agency, web communication and marketing, securities, computer programing, aerodrome air traffic, radio communication security, port infrastructure, airline training and coaching, and project services. Additionally, it researches and develops autonomous air systems and solutions in unmanned systems; and develops and produces aircraft, tactical communication systems, and toll and traffic control and management systems. Indra Sistemas, S.A. was founded in 1921 and is headquartered in Alcobendas, Spain.

How the Company Makes Money

Indra Sistemas generates revenue through multiple channels, primarily by delivering IT services and solutions tailored to specific industry needs. Its key revenue streams include consulting services, software licensing, maintenance contracts, and project-based work in areas such as systems integration and outsourcing. The company often engages in long-term contracts with government agencies and large enterprises, which provide a steady income flow. Additionally, strategic partnerships with technology providers and collaborations on research and development projects also contribute to its earnings, enabling Indra to stay competitive in the rapidly evolving tech landscape.

Indra Sistemas Financial Statement Overview

Summary

Financials are solid overall: income statement strength (78) is supported by slightly improved net margin (6.21%) and stable EBIT/EBITDA margins, while the balance sheet (72) shows healthier leverage (debt-to-equity 0.70) and strong ROE (28.67%). Cash flow is the main constraint (65) due to a recent decline in free cash flow (-6.36% TTM), despite acceptable conversion metrics.

Income Statement

Indra Sistemas shows a solid revenue growth trajectory with a TTM revenue growth rate of 1.66%. The gross profit margin has decreased to 23.72% from 34.72% in the previous year, indicating potential cost pressures. However, the net profit margin has improved slightly to 6.21%, reflecting better cost management. EBIT and EBITDA margins are stable, indicating consistent operational efficiency.

Balance Sheet

The company has improved its debt-to-equity ratio to 0.70, indicating a healthier leverage position compared to previous years. Return on equity has increased to 28.67%, showcasing strong profitability. The equity ratio stands at 22.18%, suggesting a moderate reliance on equity financing.

Cash Flow

Free cash flow has decreased by 6.36% in the TTM, which could be a concern for liquidity. However, the operating cash flow to net income ratio of 0.23 indicates that the company is generating adequate cash from its operations relative to its net income. The free cash flow to net income ratio remains strong at 78.33%.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	6.08B	4.84B	4.34B	3.85B	3.39B	3.04B
Gross Profit	1.44B	1.68B	1.08B	1.29B	1.04B	924.22M
EBITDA	668.74M	545.28M	474.39M	388.86M	340.79M	90.07M
Net Income	377.81M	277.54M	205.75M	171.90M	143.37M	-57.47M
Balance Sheet
Total Assets	6.48B	4.96B	4.72B	4.54B	4.54B	4.46B
Cash, Cash Equivalents and Short-Term Investments	704.40M	556.58M	656.29M	974.10M	1.26B	1.19B
Total Debt	1.01B	850.87M	822.53M	1.24B	1.72B	1.94B
Total Liabilities	5.03B	3.64B	3.59B	3.53B	3.69B	3.78B
Stockholders Equity	1.44B	1.30B	1.12B	987.01M	820.17M	664.78M
Cash Flow
Free Cash Flow	486.87M	339.89M	316.81M	296.14M	295.48M	129.89M
Operating Cash Flow	621.59M	450.89M	379.52M	350.26M	344.64M	195.85M
Investing Cash Flow	-110.20M	-81.91M	-274.27M	-55.27M	-26.77M	-60.96M
Financing Cash Flow	-207.90M	-333.72M	-439.63M	-605.62M	-269.20M	209.02M

Indra Sistemas Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 62.75
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Negative
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ES:IDR, the sentiment is Positive. The current price of 62.75 is above the 20-day moving average (MA) of 52.00, above the 50-day MA of 52.64, and above the 200-day MA of 42.62, indicating a bullish trend. The MACD of 0.73 indicates Negative momentum. The RSI at 70.29 is Negative, neither overbought nor oversold. The STOCH value of 53.82 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for ES:IDR.

Indra Sistemas Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
IZER	66 Neutral	€311.45M	45.87	6.51%	―	18.40%	18.62%
IDR	63 Neutral	€8.96B	23.26	28.47%	0.52%	6.92%	57.04%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
AMS	61 Neutral	€20.74B	15.49	27.50%	2.24%	8.08%	11.80%
DOM	58 Neutral	€458.40M	24.00	9.35%	2.48%	-6.21%	-46.67%