Solocal (LOCAL) AI Stock Analysis

• Market Cap: €73.29M
• Dividend Yield: N/A
• Average Volume (3M): 13.03K
• Price to Earnings (P/E): 0.6
• Beta (1Y): 14.75
• Revenue Growth: -0.78%
• EPS Growth: N/A
• Country: FR
• Employees: 2,082
• Sector: Communication Services
• Sector Strength: 97
• 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: N/A
• Price Target Upside: N/A
• Rating Consensus: N/A
• Number of Analyst Covering: 0
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 52 Neutral
• Price Target: €4.50 ▲(7.66% Upside)

Solocal's overall stock score reflects significant financial challenges, particularly in balance sheet stability and operational efficiency. While valuation appears attractive due to a low P/E ratio, technical indicators suggest caution with potential overbought conditions. Improvements in cash flow are a positive aspect, but historical volatility remains a concern.

Positive Factors

Free cash flow improvement

A 58.9% TTM rise in free cash flow indicates materially improved cash generation. Durable FCF growth enhances the company's ability to fund operations, pay down liabilities, or invest in product and sales capabilities without relying solely on external financing.

High trailing net profitability

A strong reported net profit margin suggests the business can convert revenues into bottom-line earnings. For a local digital marketing provider, this supports reinvestment in platform and customer retention initiatives, strengthening competitive position over the medium term.

Modest revenue growth with margin recovery

Modest positive revenue growth alongside improving gross margin points to better pricing or mix and more stable recurring sales from SME digital services. These trends support predictable top-line and gross profitability, aiding multi-quarter planning and customer lifetime value expansion.

Negative Factors

Severe balance sheet weakness

Negative equity and very high leverage create sustained solvency and refinancing risk. This structural capital weakness constrains strategic investment, increases funding costs, and raises the probability of covenant pressures or forced deleveraging over the coming months.

Negative operating profitability

A negative EBIT margin signals persistent operational inefficiencies or cost base problems that reduce core earnings power. Without consistent EBIT improvement, reliance on non-operating items to report net profit undermines sustainable cash generation and long-term margin resilience.

Historic revenue and cash flow volatility

Material volatility in revenue and cash flows limits forecasting accuracy and capital allocation. For a services business dependent on SME budgets, unstable cash generation raises the risk that shortfalls could interrupt investment, customer retention programs, or debt servicing over several quarters.

Solocal Business Overview & Revenue Model

Company Description

Solocal Group S.A. provides digital services in France and internationally. Its services include connect that allows VSEs and SMEs to manage their digital presence on PagesJaunes and various Web through mobile application, or a web interface, as well as manages interactions between professionals and their customers; and booster that allows companies to increase their digital visibility in the Web. The company was formerly known as PagesJaunes Groupe and changed its name to SoLocal Group S.A. in June 2013. Solocal Group S.A. was founded in 1896 and is based in Boulogne-Billancourt, France.

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. While the income statement shows profitability with a positive net profit margin, operational inefficiencies are evident with a negative EBIT margin. The balance sheet is concerning due to high leverage and negative equity, indicating financial instability. Cash flow improvements are a positive sign, but historical volatility suggests caution.

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: Positive
• Last Price: 4.18
• 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 FR:LOCAL, the sentiment is Positive. The current price of 4.18 is below the 20-day moving average (MA) of 4.22, above the 50-day MA of 3.81, and above the 200-day MA of 3.41, indicating a bullish trend. The MACD of 0.14 indicates Positive momentum. The RSI at 67.99 is Neutral, neither overbought nor oversold. The STOCH value of 53.62 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive 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	€38.34M	10.54	―	4.85%	11.03%	-37.78%
Sector *	60 Neutral	$48.67B	4.58	-11.27%	4.14%	2.83%	-41.78%
LOCAL	52 Neutral	€73.29M	0.60	―	―	-0.78%	―
ALISP	52 Neutral	€28.14M	21.72	―	―	-1.63%	―