Solocal (LOCAL) AI Stock Analysis

• Market Cap: €55.38M
• Dividend Yield: N/A
• Average Volume (3M): 13.03K
• Price to Earnings (P/E): 0.5
• Beta (1Y): 13.80
• Revenue Growth: -0.78%
• EPS Growth: N/A
• Country: FR
• Employees: 2,082
• Sector: Services
• Sector Strength: N/A
• Industry: Advertising Agencies
• EPS (TTM): 0.16
• Shares Outstanding: 35,903,713
• 10 Day Avg. Volume: 11,092
• 30 Day Avg. Volume: 13,028
• PEG Ratio: -0.02
• Price to Book (P/B): -6.02
• Price to Sales (P/S): 0.91
• P/FCF Ratio: 45.97
• 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: €2.50
• Price Target Upside: -21.88% Downside
• Rating Consensus: Hold
• Number of Analyst Covering: 1
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 50 Neutral
• Price Target: €4.00 ▲(25.00% Upside)

Solocal's overall stock score reflects significant financial and operational challenges, as indicated by a weak balance sheet and bearish technical indicators. Despite these issues, the stock's low P/E ratio suggests potential undervaluation, which could attract value investors. However, the lack of earnings call data and corporate events limits further insights into the company's future prospects.

Solocal Business Overview & Revenue Model

Company Description

Solocal (LOCAL) is a digital marketing and advertising company based in France, focusing on providing local businesses with online visibility and customer engagement solutions. The company operates primarily in the digital marketing sector, offering services such as search engine optimization (SEO), pay-per-click advertising (PPC), social media marketing, and website development. Solocal also provides directory services and local business listings, helping clients connect with consumers in their vicinity.

How the Company Makes Money

Solocal generates revenue primarily through its digital marketing services, including SEO and PPC advertising, which are charged on a subscription basis or through performance-based models. The company also earns income from its directory services, where businesses pay for enhanced visibility and features in local search results. Additionally, partnerships with technology platforms and local service providers enhance Solocal's offerings, creating bundled services that attract more clients. The company's focus on small and medium-sized enterprises (SMEs) allows it to tap into a vast market segment that seeks affordable and effective online marketing solutions.

Solocal Financial Statement Overview

Summary

Solocal's financial performance is mixed. The income statement shows profitability with a net profit margin of 56.26%, but operational inefficiencies are evident with a negative EBIT margin of -2.81%. The balance sheet is concerning due to high leverage and negative equity, indicating financial instability. Cash flow improvements are notable, with strong free cash flow growth, but historical volatility remains a concern.

Income Statement

Solocal's income statement shows mixed results. The company has a positive net profit margin of 56.26% in the TTM period, indicating strong profitability. However, the EBIT margin is negative at -2.81%, suggesting operational challenges. Revenue growth is modest at 3.5% in the TTM, but historical data shows volatility with periods of decline. The gross profit margin improved to 27.07% in the TTM, but it remains lower than historical highs, indicating pressure on cost management.

Balance Sheet

The balance sheet reveals significant financial instability. The debt-to-equity ratio is negative, indicating that liabilities exceed equity, which is a major risk factor. Return on equity is also negative, reflecting losses relative to shareholder investment. The equity ratio is not directly calculable due to negative equity, highlighting financial distress. Overall, the balance sheet suggests high leverage and potential solvency concerns.

Cash Flow

Cash flow analysis shows some positive trends. Free cash flow growth is strong at 58.9% in the TTM, indicating improved cash generation. The operating cash flow to net income ratio is 0.16, suggesting moderate cash conversion efficiency. However, the free cash flow to net income ratio is 0.58, indicating that not all earnings are translating into free cash flow. Despite these improvements, historical volatility in cash flows remains a concern.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	420.15M	334.50M	359.66M	399.97M	428.01M	437.42M
Gross Profit	113.75M	-13.90M	181.27M	58.81M	306.85M	312.47M
EBITDA	52.37M	178.10M	55.29M	114.54M	129.82M	124.76M
Net Income	236.37M	119.90M	-45.85M	-3.25M	22.87M	65.58M
Balance Sheet
Total Assets	326.04M	331.10M	314.93M	373.84M	440.41M	494.74M
Cash, Cash Equivalents and Short-Term Investments	75.77M	70.88M	55.69M	70.97M	81.59M	62.38M
Total Debt	69.29M	80.63M	295.17M	288.87M	313.09M	330.99M
Total Liabilities	369.97M	381.74M	592.97M	604.40M	679.75M	770.85M
Stockholders Equity	-43.93M	-50.64M	-278.04M	-230.56M	-239.33M	-276.10M
Cash Flow
Free Cash Flow	25.65M	6.63M	7.48M	22.27M	43.81M	-58.69M
Operating Cash Flow	43.94M	26.60M	27.91M	53.61M	78.73M	-16.64M
Investing Cash Flow	-12.19M	-9.80M	-20.13M	-31.21M	-34.82M	-40.06M
Financing Cash Flow	-5.42M	-1.61M	-22.86M	-31.86M	-25.06M	76.66M

Solocal Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 3.20
• 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:LOCAL, the sentiment is Negative. The current price of 3.2 is below the 20-day moving average (MA) of 3.36, below the 50-day MA of 3.61, and above the 200-day MA of 3.08, indicating a neutral trend. The MACD of -0.12 indicates Positive momentum. The RSI at 35.25 is Neutral, neither overbought nor oversold. The STOCH value of 14.74 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for FR:LOCAL.

Solocal Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
ALHOP	61 Neutral	€39.09M	10.79	―	4.98%	11.03%	-37.78%
Sector *	55 Neutral	$13.29B	17.42	10.03%	0.93%	7.13%	-12.93%
LOCAL	50 Neutral	€55.38M	0.46	―	―	-0.78%	―
ALISP	41 Neutral	€22.34M	―	―	―	11.47%	-116.56%