74SOFTWARE (74SW) AI Stock Analysis

• Market Cap: €1.00B
• Dividend Yield: N/A
• Average Volume (3M): 1.85K
• Price to Earnings (P/E): 19.9
• Beta (1Y): 0.49
• Revenue Growth: 103.99%
• EPS Growth: 17.53%
• Country: FR
• Employees: 4,734
• Sector: Technology
• Sector Strength: 88
• Industry: Software - Application
• EPS (TTM): 0.20
• Shares Outstanding: 29,746,195
• 10 Day Avg. Volume: 1,207
• 30 Day Avg. Volume: 1,855
• PEG Ratio: 1.68
• Price to Book (P/B): 1.22
• Price to Sales (P/S): 1.40
• P/FCF Ratio: 32.76
• 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: €41.00
• Price Target Upside: 16.81% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 1

• Rating: 62 Neutral
• Price Target: €39.00 ▲(11.11% Upside)

74SOFTWARE's strong revenue growth and improved gross margins are positive, but declining net profit margins and increased leverage pose risks. Technical indicators suggest weak momentum, and the stock is moderately valued. Improving cash flow management and profitability are crucial for future performance.

74SOFTWARE Business Overview & Revenue Model

Company Description

74Software operates as an infrastructure software publisher in France, rest of Europe, the Americas, and the Asia Pacific. The company offers amplify software products comprising Axway Managed File Transfer that manages the critical data streams in accordance with compliance policies; Axway B2B Integration which manages business interactions across all value chains within the company; amplify platform, a management and governance platform to unify software infrastructures, streamline analysis, and deployment of digital services; Axway Financial Accounting Hub, automating and centralizing the management of accounting and financial processes; and Axway Managed Cloud Services, a cloud platform that manages critical business process. It provides specialty products that offers visibility, intelligence, and security across the digital ecosystem. The company serves banking and financial, healthcare, life sciences, automotive, energy and utilities, government, insurance, manufacturing and consumer packaged goods, and public sector industries. The company was formerly known as Axway Software SA and changed its name to 74Software in December 2024. 74Software was incorporated in 2000 and is headquartered in Scottsdale, Arizona.

How the Company Makes Money

74SOFTWARE generates revenue primarily through its software development services, which include project-based contracts and ongoing maintenance agreements. Key revenue streams come from custom software solutions tailored to specific client needs, licensing of proprietary software products, and subscription-based cloud services. Additionally, the company has formed strategic partnerships with major technology firms to enhance its service offerings and expand its market reach, which contributes to its overall earnings.

74SOFTWARE Financial Statement Overview

Summary

74SOFTWARE is experiencing strong revenue growth and improving gross margins, which are positive indicators of operational efficiency. However, declining net profit margins and increasing leverage pose potential risks. The company should focus on enhancing profitability and managing its debt levels to ensure long-term financial health. Cash flow management also requires attention to support ongoing growth and investment needs.

Income Statement

74SOFTWARE has demonstrated strong revenue growth, particularly in the most recent year with a 44.8% increase. The gross profit margin has improved significantly from 30.5% in 2022 to 46.1% in 2024, indicating better cost management. However, the net profit margin has decreased from 11.2% in 2023 to 8.5% in 2024, suggesting increased expenses or other financial pressures. Overall, the company shows robust growth but needs to manage profitability more effectively.

Balance Sheet

The company's debt-to-equity ratio has increased from 0.34 in 2023 to 0.65 in 2024, indicating higher leverage, which could pose a risk if not managed carefully. Return on equity has decreased from 10.3% in 2023 to 7.4% in 2024, reflecting reduced efficiency in generating profits from shareholders' equity. The equity ratio remains stable, suggesting a balanced asset structure. While the company maintains a solid asset base, the rising debt levels warrant attention.

Cash Flow

74SOFTWARE's free cash flow has declined by 33.5% in the latest year, highlighting potential challenges in generating cash. The operating cash flow to net income ratio is low at 0.10, indicating limited cash generation relative to net income. The free cash flow to net income ratio is moderate at 0.62, suggesting some ability to convert earnings into cash. The company needs to improve its cash flow management to support growth and financial stability.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	657.21M	461.88M	318.98M	314.03M	285.55M	297.23M
Gross Profit	158.44M	212.80M	114.44M	95.90M	78.54M	114.15M
EBITDA	116.50M	80.78M	66.64M	-28.80M	38.06M	34.99M
Net Income	42.17M	39.17M	35.83M	-40.05M	9.60M	8.48M
Balance Sheet
Total Assets	1.20B	1.24B	594.59M	571.07M	582.91M	559.35M
Cash, Cash Equivalents and Short-Term Investments	58.52M	41.44M	16.68M	18.32M	25.36M	16.16M
Total Debt	312.12M	346.13M	116.20M	117.25M	95.39M	78.74M
Total Liabilities	691.98M	708.47M	248.32M	243.25M	210.69M	203.88M
Stockholders Equity	512.66M	532.28M	346.26M	327.81M	372.21M	355.46M
Cash Flow
Free Cash Flow	82.46M	19.77M	29.72M	10.64M	10.12M	4.38M
Operating Cash Flow	106.31M	31.70M	32.15M	12.96M	12.94M	12.12M
Investing Cash Flow	-324.37M	-312.94M	-12.63M	-11.10M	-2.83M	-8.11M
Financing Cash Flow	274.31M	304.69M	-21.10M	-9.45M	-1.73M	-7.86M

74SOFTWARE Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 35.10
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For FR:74SW, the sentiment is Negative. The current price of 35.1 is below the 20-day moving average (MA) of 36.41, below the 50-day MA of 37.48, and above the 200-day MA of 34.97, indicating a neutral trend. The MACD of -0.72 indicates Positive momentum. The RSI at 31.58 is Neutral, neither overbought nor oversold. The STOCH value of 19.60 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for FR:74SW.

74SOFTWARE Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
SWP	―	€367.31M	17.75	25.87%	5.42%	14.40%	1.92%
ALBFR	―	€364.25M	42.99	21.64%	―	24.74%	18.04%
QDT	―	€498.50M	7.86	5.80%	4.83%	0.13%	11.29%
LIN	―	€237.17M	8.62	―	3.76%	0.23%	10.46%
74SW	―	€1.00B	19.89	9.71%	―	103.99%	17.53%
LSS	―	€877.20M	28.70	9.61%	1.72%	5.07%	-4.31%
Sector *	―	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%