Sopra Steria (SOP) AI Stock Analysis

• Market Cap: €3.22B
• Dividend Yield: 2.89%
• Average Volume (3M): 33.96K
• Price to Earnings (P/E): 11.5
• Beta (1Y): 1.24
• Revenue Growth: -4.12%
• EPS Growth: 43.37%
• Country: FR
• Employees: 50,988
• Sector: Technology
• Sector Strength: 86
• Industry: Information Technology Services
• EPS (TTM): 7.92
• Shares Outstanding: 20,547,700
• 10 Day Avg. Volume: 39,460
• 30 Day Avg. Volume: 33,961
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• 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: €227.00
• Price Target Upside: 40.91% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 3

• Rating: 70 Outperform
• Price Target: €201.00 ▲(24.77% Upside)

Sopra Steria's robust financial performance is the most significant factor influencing the score, supported by steady revenue growth and sound cash flow management. However, the bearish technical indicators and the need for careful debt management pose risks. The stock is reasonably valued, which helps mitigate some concerns.

Sopra Steria Business Overview & Revenue Model

Company Description

Sopra Steria Group SA provides consulting, digital, and software development services in France and internationally. The company operates through five segments: France, United Kingdom, Other Europe, Sopra Banking Software, and Other Solutions. It offers consulting services, including business and technology consulting services for large companies and public bodies; systems integration services that covers information system lifecycle and transformation programs; and cybersecurity services. The company also provides software for banks and financial institutions, human resources, and property management; business process services; and IT infrastructure management services, as well as lending solutions. It serves customers in the retail, energy and utilities, financial services, government and public sector, transport, aerospace, defense and security, insurance, telecommunication, media and entertainment, and other industries. Sopra Steria Group SA was incorporated in 1968 and is headquartered in Paris, France.

How the Company Makes Money

Sopra Steria generates revenue primarily through its consulting, systems integration, and IT services. The company operates on a project-based revenue model, where it charges clients for specific projects or ongoing service contracts. Key revenue streams include consulting services that help organizations strategize digital transformation, software development tailored to client needs, and managed services that provide ongoing IT support and infrastructure management. Significant partnerships with technology leaders such as Microsoft, Oracle, and SAP enhance its service offerings and contribute to its earnings by integrating advanced technologies into client projects. Additionally, Sopra Steria benefits from long-term contracts with government and public sector clients, providing a stable revenue base.

Sopra Steria Financial Statement Overview

Summary

Sopra Steria displays a robust financial performance characterized by steady revenue growth, improved profitability, and sound cash flow management. While the company has maintained a stable balance sheet, careful management of debt levels and maintaining revenue momentum are crucial to sustaining long-term growth.

Income Statement

The company has demonstrated strong revenue growth from 2020 to 2024, with a notable increase in gross profit margin and net profit margin over the years. The EBIT and EBITDA margins are healthy, indicating efficient cost management and operational performance. However, the slight revenue decline from 2023 to 2024 suggests a need for caution in sustaining growth momentum.

Balance Sheet

The balance sheet shows a stable debt-to-equity ratio, which is indicative of a balanced capital structure. The company has improved its equity ratio over the years, which enhances financial stability. However, the increase in total debt from 2022 to 2023 suggests a potential risk if not managed properly.

Cash Flow

The company has shown consistent growth in free cash flow, which is a positive indicator of financial health. The operating cash flow to net income ratio suggests strong cash generation capability. However, the high level of capital expenditures in certain years may impact future cash reserves if not managed well.

Breakdown	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	5.78B	5.81B	5.10B	4.68B	4.26B
Gross Profit	1.67B	851.70M	779.40M	666.00M	581.50M
EBITDA	736.80M	553.80M	539.10M	509.80M	420.00M
Net Income	250.90M	183.70M	247.80M	187.70M	106.80M
Balance Sheet
Total Assets	5.64B	6.07B	4.95B	4.77B	4.54B
Cash, Cash Equivalents and Short-Term Investments	423.40M	191.70M	355.90M	217.20M	245.50M
Total Debt	1.23B	1.64B	898.30M	909.00M	988.60M
Total Liabilities	3.66B	4.15B	3.05B	3.08B	3.09B
Stockholders Equity	1.93B	1.88B	1.85B	1.65B	1.40B
Cash Flow
Free Cash Flow	581.60M	522.00M	401.00M	403.50M	338.70M
Operating Cash Flow	656.40M	622.60M	495.20M	458.10M	392.30M
Investing Cash Flow	128.00M	-1.01B	-115.80M	-145.10M	-131.40M
Financing Cash Flow	-550.40M	228.40M	-235.50M	-342.00M	-203.70M

Sopra Steria Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 161.10
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Positive
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For FR:SOP, the sentiment is Negative. The current price of 161.1 is below the 20-day moving average (MA) of 175.76, below the 50-day MA of 190.58, and below the 200-day MA of 177.90, indicating a bearish trend. The MACD of -7.68 indicates Positive momentum. The RSI at 24.06 is Positive, neither overbought nor oversold. The STOCH value of 17.44 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for FR:SOP.

Sopra Steria Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
SOP	70 Outperform	€3.22B	11.50	14.39%	2.89%	-4.12%	43.37%
Sector *	61 Neutral	$36.05B	6.66	-10.10%	1.86%	8.68%	-8.81%
0O1S	―	€2.31B	12.39	8.78%	1.38%	―	―
0DNH	―	€866.59M	0.53	58.08%	―	―	―
0IPY	―	€596.26M	15.80	14.12%	2.80%	―	―
0HAZ	―	€20.92B	13.34	14.30%	―	―	―
0G1T	―	€1.22B	17.47	12.58%	0.78%	―	―