Wavestone (WAVE) AI Stock Analysis

• Market Cap: €1.15B
• Dividend Yield: 0.84%
• Average Volume (3M): 19.23K
• Price to Earnings (P/E): 9.7
• Beta (1Y): 0.79
• Revenue Growth: 7.00%
• EPS Growth: 20.56%
• Country: FR
• Employees: 5,875
• Sector: Services
• Sector Strength: N/A
• Industry: Information Technology Services
• EPS (TTM): 1.24
• Shares Outstanding: 24,906,332
• 10 Day Avg. Volume: 31,173
• 30 Day Avg. Volume: 19,233
• PEG Ratio: 1.16
• Price to Book (P/B): 1.89
• Price to Sales (P/S): 1.26
• P/FCF Ratio: 14.11
• 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: €72.00
• Price Target Upside: 48.61% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 1
• EPS Forecast (FY): 3.37
• Revenue Forecast (FY): €955.40M

• Rating: 76 Outperform
• Price Target: €51.00 ▲(5.26% Upside)
• Action: Reiterated Date: 11/01/25
• Date: Action: Reiterated 11/01/25

Wavestone's strong financial performance and positive technical indicators are the primary drivers of its stock score. The company's solid revenue growth, profitability, and cash flow generation provide a stable foundation. While the technical analysis suggests bullish momentum, the valuation is fair but not particularly compelling. The absence of significant earnings call insights or corporate events limits additional influences on the score.

Positive Factors

Revenue growth

Consistent revenue growth near 7% shows sustained market demand for digital and IT consulting. For a services firm, steady top-line expansion supports scale, recurring long-term project revenues and pricing power across financial and telecom clients, underpinning durable growth over months.

Free cash flow generation

Strong FCF growth and nearly one-to-one conversion of earnings into free cash provide financial flexibility. High operating cash to net income (1.18) supports reinvestment, capacity building, and shareholder returns while buffering the business against short-term revenue swings common in consulting.

Conservative leverage

Very low leverage and a strong equity base reduce financial risk and increase resilience. This conservative balance sheet gives the firm capacity to invest in talent and technology, pursue strategic partnerships, and withstand cyclical downturns without forcing dilutive financing or asset sales.

Negative Factors

Modest net margin

An ~8% net margin is positive but modest for long-term shareholder value. The slight decline implies rising cost or pricing pressure. Sustaining margin expansion is critical as wage inflation, subcontractor costs, or pricing competition could compress profitability over the next several quarters.

ROE moderate and falling

ROE near 12% is moderate and a downward trend weakens returns to shareholders. If ROE erosion continues, it signals inefficiencies in capital use or margin pressures. Reversing this requires either higher margins, better project productivity, or more efficient capital deployment.

Consulting model utilization risk

Revenue depends on consultant utilization and successful contract renewals. This model exposes the company to demand cyclicality and utilization dips that can rapidly reduce revenue and margins. Scaling profitably requires continued high utilization and strong client retention.

Wavestone Business Overview & Revenue Model

Company Description

Wavestone (WAVE) is a leading consulting firm based in France, specializing in digital transformation, IT strategy, and operational excellence. The company operates primarily in the consulting sector, catering to a diverse client base that includes large corporations and public institutions. Wavestone's core services encompass management consulting, technology consulting, and digital advisory, helping organizations navigate complex challenges and enhance their performance through innovative solutions.

How the Company Makes Money

Wavestone generates revenue primarily through its consulting services, which are billed based on project fees and hourly rates for consultants. The company engages in various long-term projects and advisory contracts, which can contribute to steady income streams. Key revenue streams include management consulting, technology and digital transformation projects, and operational efficiency assessments. Wavestone also benefits from partnerships with technology providers, enabling it to offer integrated solutions to clients, enhancing its value proposition and overall profitability. Additionally, the firm's reputation and expertise in specific sectors, such as financial services and telecommunications, allow it to command premium pricing for its specialized services.

Wavestone Financial Statement Overview

Summary

Wavestone exhibits strong financial performance with impressive revenue growth and solid profitability margins. The company's conservative leverage and robust cash flow generation enhance its financial stability. Minor areas for improvement include enhancing net profit margins and return on equity.

Income Statement

Wavestone has demonstrated strong revenue growth over the years, with a notable 6.97% increase in the most recent period. The company maintains healthy margins, with a gross profit margin of 36.52% and a net profit margin of 8.01%. The EBIT and EBITDA margins are also robust at 11.47% and 13.55%, respectively, indicating efficient operational management. However, the slight decline in net profit margin compared to previous years suggests room for improvement in cost management.

Balance Sheet

The balance sheet reflects a stable financial position with a low debt-to-equity ratio of 0.13, indicating conservative leverage. The return on equity stands at 11.96%, showcasing effective use of equity to generate profits. The equity ratio of 64.49% highlights a strong equity base relative to total assets. While the overall financial health is solid, the slight decrease in ROE from previous years suggests potential for enhancing shareholder returns.

Cash Flow

Wavestone's cash flow performance is commendable, with a 17.23% growth in free cash flow, indicating strong cash generation capabilities. The operating cash flow to net income ratio of 1.18 suggests efficient conversion of profits into cash. The free cash flow to net income ratio of 0.95 further supports the company's ability to generate cash relative to its earnings. Despite these strengths, maintaining consistent cash flow growth remains crucial.

Breakdown	TTM	Mar 2025	Mar 2024	Mar 2023	Mar 2022	Mar 2021
Income Statement
Total Revenue	943.94M	943.67M	701.06M	532.26M	470.06M	417.61M
Gross Profit	119.78M	344.64M	167.79M	116.41M	215.94M	93.49M
EBITDA	128.29M	127.84M	95.55M	77.61M	80.33M	53.03M
Net Income	78.64M	75.56M	58.20M	50.07M	51.03M	25.38M
Balance Sheet
Total Assets	934.48M	979.95M	977.74M	536.79M	494.24M	446.47M
Cash, Cash Equivalents and Short-Term Investments	33.52M	78.35M	77.48M	70.82M	108.25M	88.01M
Total Debt	40.52M	80.77M	84.39M	59.46M	65.97M	86.44M
Total Liabilities	289.06M	346.55M	406.35M	237.74M	237.25M	240.41M
Stockholders Equity	644.07M	631.96M	569.47M	299.05M	256.98M	206.06M
Cash Flow
Free Cash Flow	101.83M	84.44M	78.67M	35.36M	55.23M	69.19M
Operating Cash Flow	105.93M	89.28M	81.77M	41.15M	56.34M	70.82M
Investing Cash Flow	-22.99M	-48.74M	-69.02M	-52.73M	-12.48M	-849.00K
Financing Cash Flow	-101.77M	-40.18M	-7.41M	-25.85M	-23.96M	-47.17M

Wavestone Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 48.45
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For FR:WAVE, the sentiment is Negative. The current price of 48.45 is above the 20-day moving average (MA) of 47.91, below the 50-day MA of 52.97, and below the 200-day MA of 52.96, indicating a bearish trend. The MACD of -1.03 indicates Negative momentum. The RSI at 38.87 is Neutral, neither overbought nor oversold. The STOCH value of 18.30 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for FR:WAVE.

Wavestone Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
WAVE	76 Outperform	€1.15B	9.75	12.87%	0.84%	7.00%	20.56%
AUB	75 Outperform	€534.52M	11.49	12.71%	2.54%	1.02%	6.31%
NRO	72 Outperform	€841.77M	20.10	14.08%	3.07%	7.39%	4.58%
SOP	67 Neutral	€2.46B	10.15	14.39%	3.03%	-4.12%	43.37%
ATE	57 Neutral	€1.97B	23.95	6.98%	2.08%	-0.23%	-37.70%
Sector *	55 Neutral	$13.29B	17.42	10.03%	0.93%	7.13%	-12.93%
ATO	41 Neutral	€760.86M	-0.69	319.82%	―	-14.60%	―