Lectra SA (LSS) AI Stock Analysis

• Market Cap: €721.42M
• Dividend Yield: 1.76%
• Average Volume (3M): 20.73K
• Price to Earnings (P/E): 27.9
• Beta (1Y): 0.74
• Revenue Growth: 0.40%
• EPS Growth: -9.67%
• Country: FR
• Employees: 3,000
• Sector: General
• Sector Strength: N/A
• Industry: Software - Application
• EPS (TTM): 0.55
• Shares Outstanding: 37,832,966
• 10 Day Avg. Volume: 15,399
• 30 Day Avg. Volume: 20,725
• PEG Ratio: -2.18
• Price to Book (P/B): 2.81
• Price to Sales (P/S): 1.91
• P/FCF Ratio: 15.18
• 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: €28.00
• Price Target Upside: 12.00% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 1
• EPS Forecast (FY): 0.92
• Revenue Forecast (FY): €522.72M

• Rating: 58 Neutral
• Price Target: €21.00 ▼(-16.00% Downside)
• Action: Reiterated Date: 02/18/26
• Date: Action: Reiterated 02/18/26

The score is supported most by stable underlying financial health (profitability, moderate leverage, positive free cash flow), but is held back by weakening recent financial momentum and a clearly bearish technical setup (below key moving averages with negative MACD). Valuation is a mild additional headwind given the higher P/E, only partly offset by the dividend yield.

Positive Factors

High gross margins

Sustained 66–75% gross margins indicate durable pricing power and an efficient product mix across software and hardware. High margins provide a persistent profitability buffer, enabling continued R&D and service investment, and supporting free cash flow even if top-line growth weakens.

Recurring revenue model

A subscription-driven software and maintenance model creates predictable, recurring revenue and stronger customer retention. This structural revenue mix smooths cash flows, improves visibility for investment planning and supports long-term client relationships and cross-sell of consulting and training services.

Moderate, improving leverage

Declining debt-to-equity shows leverage moderation and better balance-sheet posture. Lower net leverage enhances financial flexibility for capex, R&D and strategic initiatives, reduces refinancing risk, and strengthens the company's ability to withstand cyclical pressures over the medium term.

Negative Factors

Choppy, declining revenue

Repeated revenue declines indicate weakening demand or lost commercial momentum. Over a 2–6 month horizon this structural softness can erode scale economies, limit reinvestment capacity, and pressure margins and cash generation, making it harder to sustain long-term growth plans.

Cash-flow volatility

A sharp FCF drop in 2025 after a prior jump shows inconsistent cash conversion. Persistent volatility reduces predictability for dividends, buybacks and capex, raises funding risk for strategic projects, and weakens confidence in the company's ability to self-finance during downturns.

Shrinking balance-sheet cushion

Declining equity and shrinking assets signal a reduced capital buffer. A thinner balance sheet limits resilience to shocks, constrains M&A or opportunistic investments, and increases vulnerability to further earnings declines, reducing strategic optionality over the medium term.

Lectra SA Business Overview & Revenue Model

Company Description

Lectra SA designs smart industrial solutions for fashion, automotive, and furniture markets. The company's solutions include software, automated cutting equipment, and related services, which enable customers to automate and optimize product design, development, and manufacture of garments, car seats and interiors, airbags, and sofas, as well as to digitalize their processes. It also offers technical maintenance, support, training, and consulting services; and sells consumables and parts. The company operates in Europe, the Americas, the Asia-Pacific, and internationally. Lectra SA was founded in 1973 and is headquartered in Paris, France.

How the Company Makes Money

Lectra generates revenue primarily through the sale of software licenses, maintenance services, and hardware products. The company offers a subscription-based model for its software, which provides a steady stream of recurring income. Additionally, Lectra earns money from training and consulting services that help clients optimize their operations. Key partnerships with major players in the fashion and automotive industries also contribute to its earnings, as these collaborations often lead to large-scale contracts and increased demand for Lectra's solutions. The company continually invests in research and development to enhance its product offerings, ensuring it remains competitive and can adapt to evolving market trends.

Lectra SA Financial Statement Overview

Summary

Solid profitability and historically good cash conversion support quality, with moderate/improving leverage. However, revenue declines in 2023 and 2025 plus softer EBIT/net income and a 2025 drop in operating/free cash flow weaken the recent trajectory.

Income Statement

Profitability remains solid, with consistently strong gross profit margins (~66%–75%) and positive operating and net income across the period. However, growth has been choppy: after strong expansion in 2021–2022, revenue declined in 2023 and again in 2025, and profitability has softened from the 2022 peak (EBIT and net income lower in 2024–2025 than 2022–2023). Overall, this is a healthy earnings profile, but with clear signs of decelerating momentum.

Balance Sheet

Leverage appears moderate and improving, with debt-to-equity trending down from 2021 levels (about 0.44 in 2021 to ~0.32–0.38 in 2023–2024). Equity remains sizable relative to debt, supporting balance-sheet resilience. The main watch-out is that equity has drifted lower versus the 2022–2023 range and total assets fell in 2025 versus 2024, suggesting less balance-sheet expansion and potentially reduced cushion if earnings weaken.

Cash Flow

Cash generation is generally supportive: free cash flow has been consistently positive and close to net income (around ~0.87–0.92 of net income in 2021–2024). That said, cash flow volatility is notable—free cash flow jumped in 2024 but fell sharply in 2025 (down ~27%), and operating cash flow also declined in 2025 versus 2024. Overall cash conversion is decent, but recent deterioration reduces confidence in near-term consistency.

Breakdown	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	506.73M	526.67M	477.58M	521.93M	387.58M
Gross Profit	369.26M	376.87M	333.18M	347.69M	262.57M
EBITDA	75.52M	90.06M	77.70M	86.41M	50.04M
Net Income	25.96M	31.16M	33.90M	44.39M	28.25M
Balance Sheet
Total Assets	818.86M	915.68M	809.22M	834.90M	795.96M
Cash, Cash Equivalents and Short-Term Investments	65.06M	81.90M	115.05M	130.63M	130.59M
Total Debt	127.35M	134.64M	129.31M	153.65M	173.82M
Total Liabilities	458.57M	541.34M	391.36M	382.68M	395.17M
Stockholders Equity	344.86M	353.29M	409.83M	449.50M	398.06M
Cash Flow
Free Cash Flow	63.73M	81.55M	52.49M	50.10M	48.34M
Operating Cash Flow	73.75M	88.32M	59.57M	57.79M	54.51M
Investing Cash Flow	-10.61M	-80.93M	-24.25M	-12.34M	-187.34M
Financing Cash Flow	-67.66M	-44.23M	-49.53M	-46.03M	125.87M

Lectra SA Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 25.00
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For FR:LSS, the sentiment is Negative. The current price of 25 is above the 20-day moving average (MA) of 20.58, above the 50-day MA of 22.51, and above the 200-day MA of 23.45, indicating a bearish trend. The MACD of -1.05 indicates Positive momentum. The RSI at 31.63 is Neutral, neither overbought nor oversold. The STOCH value of 58.51 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for FR:LSS.

Lectra SA Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
SWP	75 Outperform	€290.03M	14.01	25.87%	5.63%	14.40%	1.92%
QDT	67 Neutral	€435.50M	6.87	5.80%	4.90%	0.13%	11.29%
LIN	63 Neutral	€188.28M	12.80	―	3.68%	0.23%	10.46%
LSS	58 Neutral	€721.42M	27.89	8.16%	1.76%	0.40%	-9.67%
ALBFR	58 Neutral	€168.71M	19.91	21.64%	―	24.74%	18.04%
Sector *	55 Neutral	$6.65B	3.83	-15.92%	6.20%	10.91%	7.18%
74SW	55 Neutral	€948.82M	23.45	9.71%	―	103.99%	17.53%