SysGroup (SYS) AI Stock Analysis

• Market Cap: £13.38M
• Dividend Yield: N/A
• Average Volume (3M): 135.67K
• Price to Earnings (P/E): ―
• Beta (1Y): -0.03
• Revenue Growth: -7.45%
• EPS Growth: 78.23%
• Country: UK
• Employees: 112
• Sector: Technology
• Sector Strength: 88
• Industry: Software - Infrastructure
• EPS (TTM): >-0.01
• Shares Outstanding: 83,653,694
• 10 Day Avg. Volume: 37,671
• 30 Day Avg. Volume: 135,670
• PEG Ratio: 0.11
• Price to Book (P/B): 0.67
• Price to Sales (P/S): 0.78
• P/FCF Ratio: -11.66
• 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: N/A
• Price Target Upside: N/A
• Rating Consensus: Hold
• Number of Analyst Covering: 0
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 51 Neutral
• Price Target: 17.00p ▲(6.25% Upside)

SysGroup's overall stock score is primarily influenced by its financial performance and technical analysis, both of which indicate challenges with profitability and bearish market momentum. However, positive corporate events, including strategic shifts and leadership confidence, provide some optimism for future growth. The valuation remains a concern due to negative earnings and lack of dividend yield.

Positive Factors

Recurring Revenue Model

SysGroup's emphasis on long-term contracts and recurring revenue provides a stable and predictable cash flow, supporting financial health and reducing volatility.

Cloud and IT Services Focus

SysGroup's focus on cloud and IT services positions it well in a growing industry, leveraging digital transformation trends to drive future growth.

Stable Gross Profit Margin

A stable gross profit margin indicates efficient cost management, allowing SysGroup to maintain profitability potential despite revenue challenges.

Negative Factors

Declining Revenue

The declining revenue trend poses a risk to SysGroup's growth prospects, potentially impacting its ability to invest in new opportunities and maintain market position.

Negative Operating Cash Flow

Negative operating cash flow suggests challenges in generating sufficient cash from operations, which could affect SysGroup's ability to fund growth and manage liabilities.

Profitability Challenges

Ongoing profitability challenges, with negative margins and net income, hinder SysGroup's ability to reinvest in the business and deliver shareholder value.

SysGroup Business Overview & Revenue Model

Company Description

SysGroup plc, together with its subsidiaries, provides managed IT and cloud hosting services in the United Kingdom and internationally. It operates through two segments, Managed IT Services and Value Added Resale. The company offers public, private, and hybrid cloud services, as well as virtual private cloud, PCI-DSS hosting, cloud desktop, and SysCloud services; managed IT services comprising managed cloud, managed infrastructure, managed IT support, managed virtual desktop, managed office 365, managed AWS, and managed azure; disaster recovery, sys-assure 365, and back up services; and IT security services, such as penetration testing, endpoint security, DDOS, email security, security awareness training, firewalls, multi factor authentication, and GDPR automation services. It also provides connectivity solutions, and IT consultancy services; and sells IT hardware, licenses, and warranties from supplier partners. The company serves charity, education, financial, government, healthcare, legal, leisure, manufacturing, retail, and tech industries. The company was formerly known as Daily Internet PLC and changed its name to SysGroup plc in July 2016. SysGroup plc was incorporated in 2007 and is based in Liverpool, the United Kingdom.

How the Company Makes Money

SysGroup generates revenue primarily through its managed IT services, which include cloud hosting, cybersecurity, and IT support. The company typically operates on a subscription-based model, allowing clients to pay a recurring fee for ongoing services. Additionally, SysGroup earns income from consulting services and project-based engagements, where clients seek specific expertise for IT deployments or upgrades. Significant partnerships with technology providers enhance its offerings and can lead to additional revenue streams through collaborative projects and integrated solutions. Overall, SysGroup's ability to adapt its services to meet client needs while maintaining strong partnerships contributes to its financial performance.

SysGroup Financial Statement Overview

Summary

SysGroup faces challenges with declining revenues and profitability, as evidenced by negative margins and net income. The balance sheet shows a stable equity position with moderate leverage, but the negative return on equity is concerning. Cash flow analysis highlights issues with operational cash generation, although free cash flow growth is a positive sign. Overall, the company needs to address its profitability and cash flow generation to improve its financial health.

Income Statement

SysGroup's income statement shows a declining revenue trend with a negative revenue growth rate of -6.41% in the most recent year. The company is struggling with profitability, as indicated by negative net profit and EBIT margins. However, the gross profit margin remains relatively stable at 48.83%, suggesting some efficiency in managing production costs.

Balance Sheet

The balance sheet reflects a moderate debt-to-equity ratio of 0.22, indicating a manageable level of leverage. However, the return on equity is negative, highlighting challenges in generating returns for shareholders. The equity ratio is not explicitly provided, but the company's equity position appears stable relative to its assets.

Cash Flow

SysGroup's cash flow statement reveals a significant increase in free cash flow growth, but operating cash flow is negative, raising concerns about cash generation from core operations. The free cash flow to net income ratio is positive, indicating that the company is generating cash despite net losses.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	20.27M	20.50M	22.71M	21.65M	14.75M	18.13M
Gross Profit	7.74M	10.01M	10.40M	11.10M	8.92M	10.50M
EBITDA	-217.00K	92.00K	-3.76M	2.52M	2.60M	2.30M
Net Income	-2.18M	-1.83M	-5.90M	-7.00K	451.00K	240.00K
Balance Sheet
Total Assets	36.37M	37.95M	30.45M	39.12M	27.56M	27.33M
Cash, Cash Equivalents and Short-Term Investments	8.12M	8.74M	1.94M	4.19M	4.13M	3.47M
Total Debt	5.06M	5.14M	5.34M	5.51M	1.14M	1.59M
Total Liabilities	13.52M	14.21M	15.68M	17.69M	6.30M	6.71M
Stockholders Equity	22.85M	23.73M	14.77M	21.43M	21.26M	20.61M
Cash Flow
Free Cash Flow	-716.00K	-1.37M	-369.00K	2.30M	1.42M	2.13M
Operating Cash Flow	-555.00K	-620.00K	190.00K	2.72M	2.31M	2.70M
Investing Cash Flow	-850.00K	-689.00K	-559.00K	-5.80M	-891.00K	-1.55M
Financing Cash Flow	-403.00K	8.11M	-1.87M	3.14M	-758.00K	-713.00K

SysGroup Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 16.00
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For GB:SYS, the sentiment is Positive. The current price of 16 is above the 20-day moving average (MA) of 15.01, below the 50-day MA of 16.28, and below the 200-day MA of 18.69, indicating a neutral trend. The MACD of -0.28 indicates Negative momentum. The RSI at 64.86 is Neutral, neither overbought nor oversold. The STOCH value of 50.97 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for GB:SYS.

SysGroup Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
FIN	67 Neutral	£8.48M	24.78	13.03%	―	9.45%	-86.94%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
SYS	51 Neutral	£13.38M	-6.25	-9.20%	―	-7.45%	78.23%
SWG	43 Neutral	£9.89M	-3.50	―	―	―	―
CLCO	41 Neutral	£1.17M	―	―	―	―	―
IOM	40 Underperform	£20.21M	-0.33	-67.57%	23.79%	25.44%	-1877.56%

SysGroup Corporate Events

SysGroup’s Strategic Shift and AI Integration Drive Growth

SysGroup has reported its half-year results, highlighting a strategic shift towards a consultative, end-to-end Managed IT Service Provider model, which is yielding positive outcomes. The company has seen significant growth in its cybersecurity revenue, now comprising 47% of total revenue, and has secured a major contract with a UK non-profit. AI integration across operations has improved service quality and customer satisfaction, while also reducing headcount and increasing productivity. Despite a slight decline in revenue compared to the previous year, SysGroup’s Managed IT Services are stabilizing, and the company is poised for growth in FY27, leveraging AI-driven efficiencies and a streamlined operating model.

SysGroup to Announce Half Year Results for 2025

SysGroup plc has announced that it will release its Half Year Results for the period ending 30 September 2025 on 3 December 2025. This announcement is significant as it provides stakeholders with insights into the company’s financial performance and strategic direction, potentially impacting its market positioning and future operations.

SysGroup Successfully Passes All AGM Resolutions

SysGroup plc announced that all resolutions proposed at its Annual General Meeting were passed with the requisite majority. This includes the reappointment of directors and auditors, as well as authorizations related to share allotment and market purchases. The successful passage of these resolutions is likely to reinforce SysGroup’s operational stability and strategic direction, potentially enhancing its position in the UK mid-market for cloud, cybersecurity, and AI solutions.

SysGroup Chairman Increases Stake with Significant Share Purchase

SysGroup plc announced that Executive Chairman Heejae Chae has acquired 250,000 ordinary shares at an average price of 15.5 pence per share, increasing his beneficial interest to approximately 11.91% of the company’s issued share capital. This transaction highlights a significant investment by the company’s leadership, potentially signaling confidence in SysGroup’s strategic direction and future growth prospects.

SysGroup Announces Share Option Exercise by Former CFO

SysGroup plc announced that its former Chief Financial Officer, Martin Audcent, has exercised options over 400,000 ordinary shares. This exercise does not alter the company’s issued ordinary share capital, which remains at 85,515,091 shares, with 83,653,697 total voting rights available for shareholders. This move is part of the company’s ongoing management of its share capital and does not impact the company’s market positioning or operations.