74SOFTWARE (74SW) AI Stock Analysis

• Market Cap: €948.82M
• Dividend Yield: N/A
• Average Volume (3M): 1.85K
• Price to Earnings (P/E): 29.9
• Beta (1Y): 0.44
• Revenue Growth: 103.99%
• EPS Growth: 17.53%
• Country: FR
• Employees: 4,734
• Sector: Technology
• Sector Strength: 88
• Industry: Software - Application
• EPS (TTM): 1.19
• Shares Outstanding: 29,746,195
• 10 Day Avg. Volume: 1,207
• 30 Day Avg. Volume: 1,855
• PEG Ratio: -1.78
• Price to Book (P/B): 2.20
• Price to Sales (P/S): 1.72
• P/FCF Ratio: 0.00
• 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: €46.00
• Price Target Upside: 15.29% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 3
• EPS Forecast (FY): 2.56
• Revenue Forecast (FY): €730.99M

• Rating: 55 Neutral
• Price Target: €35.00 ▼(-12.28% Downside)
• Action: Reiterated Date: 02/27/26
• Date: Action: Reiterated 02/27/26

The score is led by improving operating performance and a more stable balance sheet, but is held back by a sharp drop in free cash flow and weaker net-margin conversion. Technically, the stock trends below key moving averages with negative MACD, limiting near-term momentum, while valuation appears reasonable rather than compelling at a 18.62 P/E.

Positive Factors

Re-accelerating revenue growth

Revenue re-acceleration in 2025 after two years of stagnation signals strengthening demand and better commercial traction for subscription and services offerings. For a software firm with recurring revenue, sustained top-line growth improves predictable cash flows and supports investment in product and scale over the medium term.

Sharply improved gross margin and operating profit

A large gross margin improvement and mid-teens operating profitability reflect stronger unit economics and operating leverage typical of scalable software models. Higher gross margins provide durable cushion to absorb SG&A or R&D, enabling reinvestment while maintaining sustainable operating profits if product mix and delivery efficiencies persist.

Moderating leverage and stronger balance sheet stability

Lower debt-to-equity and a larger equity base reduce financial risk and enhance flexibility to fund growth or withstand downturns. Improving leverage supports enduring financial resilience, lowers interest burden, and gives management capacity to pursue strategic investments or partnerships without immediate refinancing pressure.

Negative Factors

Collapse in free cash flow

Free cash flow falling to zero materially weakens the firm's internal funding capability and increases reliance on external financing or equity to sustain growth. For a software company, unstable cash conversion suggests working-capital strain or heavy reinvestment that could impair capital returns and constrain strategic optionality over the medium term.

Weaker net-margin conversion

Declining net margin despite stronger gross profits indicates rising below-the-line costs or non-recurring charges that erode bottom-line conversion. This volatility undermines earnings quality and makes long-term profitability less predictable, complicating free cash flow recovery and shareholder return prospects absent structural cost control.

Modest returns on equity

Falling ROE implies the expanding capital base is not translating into proportionate shareholder returns, suggesting efficiency or allocation issues. Persistently modest ROE can constrain long-term value creation relative to peers and limits the firm's ability to justify higher capital intensity without clear improvements in asset productivity.

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 through multiple streams, primarily by offering subscription-based software services and customized software development projects. The company charges clients monthly or annual fees for access to its cloud-based solutions, ensuring a steady income. Additionally, it earns from one-time fees for bespoke software projects tailored to specific business needs. Key partnerships with cloud service providers and technology vendors enhance its offerings and market reach, contributing significantly to its earnings.

74SOFTWARE Financial Statement Overview

Summary

Operations improved in 2025 with re-accelerating revenue growth and sharply higher gross margin supporting solid operating profitability, and leverage is moderating. However, net margin compressed and free cash flow deteriorated to zero, making cash generation the key weakness.

Income Statement

Revenue growth has re-accelerated meaningfully in 2025 (+7.6% vs. near-flat growth in 2023–2024), and profitability is structurally improved versus the 2022 loss year. Gross margin expanded sharply in 2025 (~67% vs. ~46% in 2024), supporting solid operating profitability (~12% operating margin). Offsetting this, net margin has compressed in 2025 (~5.8% vs. ~8.5% in 2024 and ~11.2% in 2023), indicating higher below-the-line costs and more volatile bottom-line conversion despite strong gross profit.

Balance Sheet

Leverage is moderate and improved in 2025, with debt-to-equity falling to ~0.44 from ~0.65 in 2024, which reduces financial risk. Equity has grown versus earlier years, supporting balance sheet stability. The main trade-off is that returns on equity are modest (~7% in 2024–2025, down from ~10% in 2023), suggesting the larger capital base is not translating into higher shareholder returns.

Cash Flow

Cash generation in 2025 improved at the operating level (operating cash flow rose to ~111M from ~32M in 2024), but cash flow quality vs. earnings remains mixed and inconsistent across years. Free cash flow is a key weakness: it fell to zero in 2025 after being positive in prior years, and cash conversion from profits deteriorated materially (free cash flow relative to net income dropped from ~0.62 in 2024 to 0.0 in 2025), indicating heavier reinvestment and/or working-capital drag.

Breakdown	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	707.20M	461.88M	318.98M	314.03M	285.55M
Gross Profit	475.10M	212.80M	114.44M	95.90M	78.54M
EBITDA	84.40M	80.78M	66.64M	-28.80M	38.06M
Net Income	40.80M	39.17M	35.83M	-40.05M	9.60M
Balance Sheet
Total Assets	1.20B	1.24B	594.59M	571.07M	582.91M
Cash, Cash Equivalents and Short-Term Investments	48.40M	41.44M	16.68M	18.32M	25.36M
Total Debt	241.40M	346.13M	116.20M	117.25M	95.39M
Total Liabilities	644.40M	708.47M	248.32M	243.25M	210.69M
Stockholders Equity	553.50M	532.28M	346.26M	327.81M	372.21M
Cash Flow
Free Cash Flow	0.00	19.77M	29.72M	10.64M	10.12M
Operating Cash Flow	110.90M	31.70M	32.15M	12.96M	12.94M
Investing Cash Flow	-26.40M	-312.94M	-12.63M	-11.10M	-2.83M
Financing Cash Flow	-76.00M	304.69M	-21.10M	-9.45M	-1.73M

74SOFTWARE Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 39.90
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For FR:74SW, the sentiment is Neutral. The current price of 39.9 is above the 20-day moving average (MA) of 30.66, above the 50-day MA of 35.67, and above the 200-day MA of 37.41, indicating a neutral trend. The MACD of -0.66 indicates Negative momentum. The RSI at 49.34 is Neutral, neither overbought nor oversold. The STOCH value of 68.50 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for FR:74SW.

74SOFTWARE Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
SWP	75 Outperform	€290.03M	10.19	25.87%	5.63%	14.40%	1.92%
QDT	67 Neutral	€435.50M	6.97	5.80%	4.90%	0.13%	11.29%
LIN	63 Neutral	€188.28M	15.07	―	3.68%	0.23%	10.46%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
LSS	58 Neutral	€717.64M	37.27	8.16%	1.76%	0.40%	-9.67%
ALBFR	58 Neutral	€175.77M	21.50	21.64%	―	24.74%	18.04%
74SW	55 Neutral	€948.82M	29.86	9.71%	―	103.99%	17.53%