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Wavestone SA (FR:WAVE)
:WAVE

Wavestone (WAVE) AI Stock Analysis

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FR

Wavestone

(LSE:WAVE)

Rating:79Outperform
Price Target:
Wavestone demonstrates a strong financial foundation with impressive revenue growth and cash flow management, which significantly contributes to its overall score. Technical analysis suggests mixed momentum, requiring cautious monitoring, while the valuation is fair with a reasonable P/E ratio and modest dividend yield. These factors collectively indicate a solid but cautiously optimistic outlook for Wavestone's stock.
Positive Factors
Growth Potential
In the event of a cyclical rebound, Wavestone will be able to benefit from embedded growth of +3% and a capacity to lift its utilisation rate by two percentage points.
Valuation
Wavestone trades at a meaningful discount to the stock's historical valuation multiples, and to completed industry deals.
Negative Factors
Earnings Outlook
Wavestone published slightly disappointing half-year results for 2024/25 and a profit warning for the FY-24/25.
Financial Performance
The IT consulting expert reported a slight decline in sales, as expected, and confirmed a slight decline in proforma adjusted EBIT.
Market Conditions
The French political crisis and budgetary situation is a significant headwind for quarters to come.

Wavestone (WAVE) vs. iShares MSCI France ETF (EWQ)

Wavestone Business Overview & Revenue Model

Company DescriptionWavestone SA provides management and digital consulting services primarily in France and internationally. It offers consulting services in the areas of finance, telecom, media and entertainment, consumer goods and retail, manufacturing, energy and utilities, transportation and travel, real estate, public sector, and international institutions. The company was formerly known as Solucom SA and changed its name to Wavestone SA in July 2016. Wavestone SA was founded in 1990 and is based in Paris, France.
How the Company Makes MoneyWavestone makes money primarily through consulting fees charged for its management consulting services. The company generates revenue by providing expert advice and solutions to clients seeking to improve their business operations, implement digital transformations, and drive strategic initiatives. Key revenue streams include project-based consulting engagements, retainer agreements, and specialized advisory services. Wavestone also benefits from long-term partnerships with major corporations and government entities, which contribute to stable and recurring income.

Wavestone Financial Statement Overview

Summary
Wavestone's financial performance is impressive, characterized by robust revenue growth, strong profitability, and efficient cash flow management. The company's balance sheet reflects financial stability and prudent debt management. Overall, Wavestone is well-positioned for continued success in the competitive software services industry.
Income Statement
90
Very Positive
Wavestone demonstrates strong revenue growth with a significant increase from the previous year, showing resilience in the software services industry. The gross profit margin is stable, and the net profit margin has improved, reflecting enhanced operational efficiency. EBIT and EBITDA margins are healthy, indicating effective cost management and profitability.
Balance Sheet
85
Very Positive
The company's balance sheet is robust with a favorable debt-to-equity ratio, indicating prudent leverage management. The equity ratio is solid, showcasing strong financial stability. High return on equity (ROE) highlights effective utilization of shareholder equity to generate profits.
Cash Flow
92
Very Positive
Wavestone's cash flow is exceptional with substantial free cash flow growth, ensuring liquidity and financial flexibility. The operating cash flow to net income ratio signifies strong cash generation abilities, and the free cash flow to net income ratio further underscores the company's capability to convert profits into free cash flow efficiently.
Breakdown
TTMMar 2024Mar 2023Mar 2022Mar 2021Mar 2020
Income StatementTotal Revenue
882.19M701.06M532.26M470.06M417.61M422.04M
Gross Profit
197.12M167.79M116.41M215.94M93.49M94.81M
EBIT
94.14M85.78M72.69M72.81M43.26M53.52M
EBITDA
106.65M95.55M77.61M80.33M53.03M64.21M
Net Income Common Stockholders
62.46M58.20M50.07M51.03M25.38M31.14M
Balance SheetCash, Cash Equivalents and Short-Term Investments
50.71M77.48M70.82M108.25M88.01M65.13M
Total Assets
384.23M977.74M536.79M494.24M446.47M449.57M
Total Debt
89.42M84.39M59.46M65.97M86.44M131.91M
Net Debt
38.71M6.91M-11.37M-42.28M-1.56M66.78M
Total Liabilities
233.42M406.35M237.74M237.25M240.41M272.43M
Stockholders Equity
150.81M569.47M299.05M256.98M206.06M177.14M
Cash FlowFree Cash Flow
72.03M78.67M35.36M55.23M69.19M49.75M
Operating Cash Flow
76.24M81.77M41.15M56.34M70.82M55.30M
Investing Cash Flow
-100.33M-69.02M-52.73M-12.48M-849.00K-29.53M
Financing Cash Flow
20.91M-7.41M-25.85M-23.96M-47.17M-11.17M

Wavestone Technical Analysis

Technical Analysis Sentiment
Positive
Last Price56.60
Price Trends
50DMA
49.06
Positive
100DMA
48.67
Positive
200DMA
48.83
Positive
Market Momentum
MACD
2.02
Negative
RSI
73.59
Negative
STOCH
85.16
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For FR:WAVE, the sentiment is Positive. The current price of 56.6 is above the 20-day moving average (MA) of 52.84, above the 50-day MA of 49.06, and above the 200-day MA of 48.83, indicating a bullish trend. The MACD of 2.02 indicates Negative momentum. The RSI at 73.59 is Negative, neither overbought nor oversold. The STOCH value of 85.16 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for FR:WAVE.

Wavestone Peers Comparison

Overall Rating
UnderperformOutperform
Sector (62)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
79
Outperform
€1.40B18.3512.58%1.02%54.27%-3.69%
62
Neutral
$11.90B10.64-7.50%2.90%7.41%-8.19%
€2.56B13.718.78%2.04%
€715.26M0.0158.08%
€642.89M17.2614.12%2.56%
€1.14B21.5414.35%2.57%
€3.95B15.6316.26%2.39%
* Technology Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
FR:WAVE
Wavestone
56.60
-5.65
-9.07%
GB:0O1S
ALTEN SA
76.00
-37.81
-33.22%
GB:0DNH
Atos SE
38.82
-33.08
-46.01%
GB:0IPY
Aubay Société Anonyme
50.20
8.02
19.01%
GB:0GX2
Neurones
46.45
1.25
2.77%
GB:0NJQ
Sopra Steria
200.80
-6.43
-3.10%

Wavestone Corporate Events

Wavestone Updates Share Capital and Voting Rights
Mar 10, 2025

Wavestone announced that as of February 28, 2025, its capital comprised 24,906,332 shares in circulation, with a total of 37,223,364 voting rights. This update reflects the company’s adherence to regulatory requirements and highlights its strong market position, potentially impacting shareholder decisions and market perceptions.

Wavestone Updates Shareholders on Capital Structure and Voting Rights
Feb 10, 2025

Wavestone has announced that as of January 31, 2025, its capital comprises 24,906,332 outstanding shares and a total of 37,228,464 voting rights. This development reflects the firm’s ongoing commitment to transparency and effective stakeholder communication, enhancing its industry position and reinforcing its operational strategy.

Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.