SysGroup (SYS) AI Stock Analysis

• Market Cap: £13.18M
• Dividend Yield: N/A
• Average Volume (3M): 42.91K
• Price to Earnings (P/E): ―
• Beta (1Y): -0.03
• Revenue Growth: -9.74%
• EPS Growth: 80.02%
• Country: UK
• Employees: 112
• Sector: Technology
• Sector Strength: 85
• Industry: Software - Infrastructure
• EPS (TTM): -0.01
• Shares Outstanding: 83,653,694
• 10 Day Avg. Volume: 27,842
• 30 Day Avg. Volume: 42,906
• 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: £17.00
• Price Target Upside: 7.94% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 1

• Rating: 45 Neutral
• Price Target: 17.00p ▲(7.94% Upside)

SysGroup's overall stock score is primarily impacted by its financial performance and technical analysis. The company faces significant challenges with declining revenues, negative profitability, and poor cash flow generation. Technical indicators further suggest a bearish trend, with the stock being oversold. Valuation metrics are also unfavorable due to a negative P/E ratio and lack of dividend yield. These factors collectively result in a low overall stock score.

Positive Factors

Recurring Revenue Model

SysGroup's emphasis on long-term contracts for managed services and cloud solutions provides a stable revenue base, reducing volatility and enhancing financial predictability. This model supports sustained cash flow and allows for better financial planning and investment in growth initiatives.

Stable Gross Profit Margin

A stable gross profit margin indicates SysGroup's ability to manage costs effectively, which is crucial for maintaining profitability. This efficiency in cost management can provide a buffer against revenue fluctuations and support long-term financial health.

Free Cash Flow Growth

Despite challenges in operating cash flow, the growth in free cash flow reflects SysGroup's ability to generate cash from its investments. This growth can be reinvested into the business for expansion or used to strengthen the balance sheet, supporting long-term sustainability.

Negative Factors

Declining Revenue

The declining revenue trend poses a significant challenge for SysGroup, potentially impacting its ability to invest in growth and maintain competitive positioning. Sustained revenue decline can lead to reduced market share and pressure on profitability.

Negative Profitability

Negative profitability highlights SysGroup's challenges in converting revenue into profit, which can strain financial resources and limit growth opportunities. Addressing these profitability issues is critical for long-term viability and competitiveness.

Negative Operating Cash Flow

Negative operating cash flow suggests SysGroup is not generating sufficient cash from its core operations, which can impact its ability to fund day-to-day activities and invest in strategic initiatives. Improving operational cash generation is essential for financial stability.

SysGroup Business Overview & Revenue Model

Company Description

SysGroup (SYS) is a UK-based technology company specializing in providing managed IT services and cloud solutions. The company operates primarily in the IT services sector, focusing on delivering innovative digital transformation solutions, cybersecurity, and infrastructure management. SysGroup's core offerings include cloud hosting, IT support, and consultancy services aimed at enhancing operational efficiency for businesses of various sizes.

How the Company Makes Money

SysGroup generates revenue through multiple streams, primarily from its managed services and cloud solutions. The company charges clients for ongoing support and management of their IT infrastructure, which includes services like cloud hosting, cybersecurity measures, and IT consultancy. Additionally, SysGroup earns revenue from project-based engagements, where they implement IT solutions tailored to specific client needs. Key partnerships with technology providers and software vendors also contribute to their revenue model, allowing them to offer a broader range of services and maintain competitive pricing. The company's focus on recurring revenue through long-term contracts enhances its financial stability and predictability.

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	20.50M	20.50M	22.71M	21.65M	14.75M	18.13M
Gross Profit	7.91M	10.01M	10.40M	11.10M	8.92M	10.50M
EBITDA	119.00K	92.00K	-3.76M	2.44M	2.62M	2.41M
Net Income	-1.83M	-1.83M	-5.90M	-7.00K	451.00K	240.00K
Balance Sheet
Total Assets	37.95M	37.95M	30.45M	39.12M	27.56M	27.33M
Cash, Cash Equivalents and Short-Term Investments	8.74M	8.74M	1.94M	4.19M	4.13M	3.47M
Total Debt	5.14M	5.14M	5.34M	5.51M	1.14M	1.59M
Total Liabilities	14.21M	14.21M	15.68M	17.69M	6.30M	6.71M
Stockholders Equity	23.73M	23.73M	14.77M	21.43M	21.26M	20.61M
Cash Flow
Free Cash Flow	-866.00K	-1.37M	-369.00K	2.30M	1.42M	2.13M
Operating Cash Flow	-687.00K	-620.00K	190.00K	2.72M	2.31M	2.70M
Investing Cash Flow	-1.06M	-689.00K	-559.00K	-5.80M	-891.00K	-1.55M
Financing Cash Flow	8.54M	8.11M	-1.87M	3.14M	-758.00K	-713.00K

SysGroup Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 15.75
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Positive
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For GB:SYS, the sentiment is Negative. The current price of 15.75 is below the 20-day moving average (MA) of 17.06, below the 50-day MA of 18.57, and below the 200-day MA of 20.08, indicating a bearish trend. The MACD of -0.78 indicates Positive momentum. The RSI at 9.07 is Positive, neither overbought nor oversold. The STOCH value of 27.49 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for GB:SYS.

SysGroup Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
FIN	64 Neutral	£10.00M	29.74	13.03%	―	9.45%	-86.94%
Sector *	61 Neutral	$36.58B	11.16	-10.43%	1.86%	8.71%	-7.09%
SWG	54 Neutral	£13.58M	―	-6.16%	―	-11.19%	63.83%
CLCO	54 Neutral	£1.84M	―		―	―	―
SYS	45 Neutral	£13.18M	―	-9.53%	―	-9.74%	80.02%
IOM	44 Neutral	£24.02M	9.41	-58.97%	20.19%	12.92%	-949.57%
CYK	―	£1.20M	0.12		―	―	―

SysGroup Corporate Events

SysGroup Strengthens Position with Strategic Investments and AWS Partnership

SysGroup plc announced its year-end trading update, reporting revenues of £20.5m and an adjusted EBITDA of £0.9m, aligning with market expectations. Despite a decrease in revenue from the previous year, the company has strengthened its financial position with a significant increase in cash reserves. SysGroup has made strategic investments, including the acquisition of Crossword Consulting Limited and enhancements to its AI service desk platform. The company achieved AWS Advanced Partner status and expanded its cybersecurity offerings, positioning itself as a key player in the UK’s technology services sector. These developments are expected to drive growth and deepen customer relationships, aligning with SysGroup’s strategic vision.

Spark’s Take on GB:SYS Stock

According to Spark, TipRanks’ AI Analyst, GB:SYS is a Neutral.

SysGroup’s overall stock score of 55 reflects mixed financial performance, with significant challenges in profitability and cash flow. However, technical analysis shows moderate momentum, and recent corporate events highlight strategic growth initiatives. Valuation concerns due to negative earnings weigh on the score, but insider confidence through share purchases offers a positive outlook.

To see Spark’s full report on GB:SYS stock, click here.

SysGroup Reports FY25 Trading Update and Strategic Investments

SysGroup plc reported a trading update for the year ending March 31, 2025, with revenues of £20.5 million and an adjusted EBITDA of £0.9 million, aligning with market expectations despite a decrease from the previous year. The company made significant investments to enhance its position as a top provider of AI and machine learning solutions for SMEs, achieving milestones such as AWS Advanced Partner status and expanding its cybersecurity offerings. These strategic moves, supported by a strong cash position, aim to drive growth and solidify SysGroup’s market presence.

Spark’s Take on GB:SYS Stock

According to Spark, TipRanks’ AI Analyst, GB:SYS is a Neutral.

SysGroup’s overall stock score of 55 reflects mixed financial performance, with significant challenges in profitability and cash flow. However, technical analysis shows moderate momentum, and recent corporate events highlight strategic growth initiatives. Valuation concerns due to negative earnings weigh on the score, but insider confidence through share purchases offers a positive outlook.

To see Spark’s full report on GB:SYS stock, click here.

SysGroup Enhances Data Security Offerings Through Rubrik Partnership

SysGroup plc has joined Rubrik’s Advanced Partner Program, enhancing its ability to deliver Rubrik’s data security and recovery solutions across the UK. This partnership positions SysGroup to better address the growing demand for secure, scalable, and AI-powered solutions, reinforcing its commitment to future-proofing IT infrastructures for UK organizations. By integrating Rubrik Security Cloud, SysGroup aims to provide robust data protection and support business growth in a complex digital landscape.