Wavestone (WAVE) AI Stock Analysis

• Market Cap: €1.45B
• Dividend Yield: 0.77%
• Average Volume (3M): 10.28K
• Price to Earnings (P/E): 18.9
• Beta (1Y): 0.91
• Revenue Growth: 54.27%
• EPS Growth: -3.69%
• Country: FR
• Employees: 5,875
• Sector: Technology
• Sector Strength: 82
• Industry: Information Technology Services
• EPS (TTM): 1.98
• Shares Outstanding: 24,906,332
• 10 Day Avg. Volume: 13,251
• 30 Day Avg. Volume: 10,280
• PEG Ratio: -11.29
• Price to Book (P/B): 2.97
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 25.08
• 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: €65.00
• Price Target Upside: 11.88% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 1

• Rating: 79 Outperform
• 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 Business Overview & Revenue Model

Company Description

Wavestone (WAVE) is a leading global management consulting firm that specializes in guiding major transformations in organizations across various sectors, including financial services, energy and utilities, healthcare, and telecommunications. The company offers strategic consulting services, digital transformation solutions, and operational improvement strategies, helping businesses optimize their performance and adapt to market changes.

How the Company Makes Money

Wavestone 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

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

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

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
TTM	Mar 2024	Mar 2023	Mar 2022	Mar 2021	Mar 2020
Income Statement		Total Revenue
882.19M	701.06M	532.26M	470.06M	417.61M	422.04M
	Gross Profit
197.12M	167.79M	116.41M	215.94M	93.49M	94.81M
	EBIT
94.14M	85.78M	72.69M	72.81M	43.26M	53.52M
	EBITDA
106.65M	95.55M	77.61M	80.33M	53.03M	64.21M
	Net Income Common Stockholders
62.46M	58.20M	50.07M	51.03M	25.38M	31.14M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
50.96M	77.48M	70.82M	108.25M	88.01M	65.13M
	Total Assets
948.54M	977.74M	536.79M	494.24M	446.47M	449.57M
	Total Debt
117.96M	84.39M	59.46M	65.97M	86.44M	131.91M
	Net Debt
67.00M	6.91M	-11.37M	-42.28M	-1.56M	66.78M
	Total Liabilities
368.91M	406.35M	237.74M	237.25M	240.41M	272.43M
	Stockholders Equity
578.40M	569.47M	299.05M	256.98M	206.06M	177.14M
Cash Flow		Free Cash Flow
72.03M	78.67M	35.36M	55.23M	69.19M	49.75M
	Operating Cash Flow
76.24M	81.77M	41.15M	56.34M	70.82M	55.30M
	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 Price: 58.10
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Negative
• STOCH: 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 58.1 is above the 20-day moving average (MA) of 53.12, above the 50-day MA of 49.27, and above the 200-day MA of 48.84, indicating a bullish trend. The MACD of 2.20 indicates Negative momentum. The RSI at 78.12 is Negative, neither overbought nor oversold. The STOCH value of 88.70 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

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
WAVE	79 Outperform	€1.45B	18.93	12.58%	0.77%	54.27%	-3.69%
PUB	79 Outperform	€25.03B	15.08	15.92%	3.40%	8.30%	26.51%
SOP	75 Outperform	€4.07B	16.11	16.26%	2.29%	-0.49%	39.02%
CAP	73 Outperform	€26.25B	15.64	15.03%	2.21%	-1.89%	1.15%
Sector *	62 Neutral	$11.92B	10.48	-7.50%	2.95%	7.40%	-8.18%
ATO	34 Underperform	€715.26M	0.01	58.08%	―	-10.44%	49.00%

Wavestone Corporate Events

Wavestone Updates Share Capital and Voting Rights

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

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.