Touchstar (TST) AI Stock Analysis

• Market Cap: £4.75M
• Dividend Yield: 5.42%
• Average Volume (3M): 8.42K
• Price to Earnings (P/E): 139.5
• Beta (1Y): 0.03
• Revenue Growth: 0.09%
• EPS Growth: -94.11%
• Country: UK
• Employees: 56
• Sector: Technology
• Sector Strength: 88
• Industry: Computer Hardware
• EPS (TTM): -0.01
• Shares Outstanding: 7,921,494
• 10 Day Avg. Volume: 6,954
• 30 Day Avg. Volume: 8,419
• PEG Ratio: -0.51
• Price to Book (P/B): 2.27
• Price to Sales (P/S): 1.13
• P/FCF Ratio: 7.66
• 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: 68 Neutral
• Price Target: 85.00p ▲(41.67% Upside)

Touchstar's overall stock score is driven by its strong financial position and positive corporate actions like the share buyback. However, the high P/E ratio and mixed technical indicators suggest caution. The company should focus on improving profitability and revenue growth to enhance its valuation.

Positive Factors

Cash Flow Generation

The substantial growth in free cash flow indicates strong liquidity and operational efficiency, providing the company with the ability to invest in growth opportunities and weather economic downturns.

Balance Sheet Health

A low debt-to-equity ratio suggests financial stability and low risk, allowing the company to maintain flexibility in its operations and investments, enhancing long-term sustainability.

Revenue Streams

Diversified revenue streams, including SaaS and partnerships, provide stable and recurring income, reducing dependency on single revenue sources and supporting long-term growth.

Negative Factors

Declining Margins

The decline in net profit margin indicates challenges in cost management or pricing power, which could affect profitability and limit the company's ability to reinvest in growth.

Revenue Decline

A decrease in revenue suggests potential issues in market demand or competitive positioning, which may hinder future growth and impact the company's market share.

Decreasing Operating Margins

The reduction in operating margins points to increased operational costs or reduced pricing power, which could strain profitability and limit investment in strategic initiatives.

Touchstar Business Overview & Revenue Model

Company Description

Touchstar plc, together with its subsidiaries, designs and builds rugged mobile computing devices under the Touchstar brand in the United Kingdom, Europe, and internationally. It also supplies, installs, and maintains software applications and hardware solutions for mobile applications in the transport, logistics, and access control industries. In addition, the company offers supply chain data capture solutions; GPS satellite tracking and vehicle telematics data; software and hardware for the oil and gas logistics sector; products for security checking clearance and recording attendance; and PODStar, an EPOD solution for SMEs and other organizations. The company was formerly known as Belgravium Technologies plc and changed its name to Touchstar plc in May 2016. Touchstar plc was incorporated in 1904 and is based in Manchester, the United Kingdom.

How the Company Makes Money

Touchstar generates revenue primarily through the sale of its software licenses and subscription services. Its core revenue model includes monthly subscription fees for cloud-based services, one-time fees for software licenses, and maintenance contracts. Additionally, Touchstar benefits from professional services such as consulting, implementation, and training, which contribute significantly to its earnings. The company has established partnerships with telecommunications providers and software integrators, which help expand its market reach and enhance its solution offerings, creating additional revenue opportunities through bundled services and co-marketing initiatives.

Touchstar Financial Statement Overview

Summary

Touchstar is in a solid financial position with strong cash flow and a healthy balance sheet. The income statement presents some challenges, with declining margins and revenue; however, the company's low debt levels and high cash flow generation offset these concerns. The company should focus on improving net profitability and revenue growth while leveraging its strong cash position to invest in growth opportunities.

Income Statement

Touchstar showed a mixed performance in its income statement. The gross profit margin for the latest year is 48.9%, indicating strong profitability from its core operations. However, the net profit margin has decreased to 5.3% from 8.8% the previous year, showing a decline in net profitability. Revenue slightly dropped by 4.6% from the previous year, which is a concern. The EBIT margin was at 4.7%, down from 8.3%, and the EBITDA margin was 17.1%, also showing a decrease from 19.7%. Overall, the company demonstrates a solid gross margin but faces challenges in maintaining its net and operating margins.

Balance Sheet

The balance sheet reflects a solid financial position with a low debt-to-equity ratio of 0.05, indicating low leverage risk. The return on equity stands at 10.7%, which is a good return for the shareholders. The equity ratio is 46.9%, which denotes a strong equity position relative to total assets. The company has maintained a stable financial position with manageable liabilities and a robust equity base.

Cash Flow

Touchstar's cash flow analysis indicates strong liquidity and cash generation capability. The free cash flow grew significantly by 1538.7% compared to the previous year, highlighting efficient cash management and operational effectiveness. The operating cash flow to net income ratio is high at 3.02, suggesting robust cash earnings relative to accounting profits. The free cash flow to net income ratio of 2.78 further supports strong cash flow generation. These metrics indicate the company is well-positioned in terms of cash flow.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	6.88M	6.89M	7.22M	6.74M	6.10M	5.89M
Gross Profit	3.60M	3.37M	4.29M	3.27M	2.79M	2.24M
EBITDA	460.00K	1.18M	1.42M	1.33M	1.07M	856.00K
Net Income	36.00K	366.00K	639.00K	558.00K	341.00K	87.00K
Balance Sheet
Total Assets	6.83M	7.32M	6.82M	7.95M	7.78M	7.02M
Cash, Cash Equivalents and Short-Term Investments	2.00M	2.92M	3.00M	4.46M	3.90M	3.18M
Total Debt	597.00K	165.00K	211.00K	1.28M	1.93M	1.92M
Total Liabilities	3.51M	3.88M	3.56M	5.01M	5.45M	5.05M
Stockholders Equity	3.32M	3.44M	3.26M	2.93M	2.33M	1.98M
Cash Flow
Free Cash Flow	1.36M	1.02M	62.00K	1.28M	791.00K	1.10M
Operating Cash Flow	1.41M	1.11M	662.00K	1.90M	1.30M	1.56M
Investing Cash Flow	-724.00K	-773.00K	-600.00K	-625.00K	-510.00K	-459.00K
Financing Cash Flow	-430.00K	-420.00K	-533.00K	-315.00K	-197.00K	-32.00K

Touchstar Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 60.00
• 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:TST, the sentiment is Negative. The current price of 60 is below the 20-day moving average (MA) of 74.25, below the 50-day MA of 75.35, and below the 200-day MA of 80.30, indicating a bearish trend. The MACD of -4.11 indicates Positive momentum. The RSI at 21.32 is Positive, neither overbought nor oversold. The STOCH value of 21.12 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for GB:TST.

Touchstar Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
CNC	69 Neutral	£192.68M	39.70	12.29%	0.95%	22.72%	-8.82%
TST	68 Neutral	£4.75M	139.53	1.05%	5.42%	0.09%	-94.11%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
TIDE	58 Neutral	£5.42M	-63.95	―	―	―	―
NXQ	55 Neutral	£41.95M	-18.62	-3.85%	5.29%	-27.57%	-130.10%
TERN	44 Neutral	£3.36M	-6.25	-19.70%	―	-77.04%	86.67%

Touchstar Corporate Events

Touchstar plc Executes Strategic Share Buyback

Touchstar plc announced the repurchase of 75,000 ordinary shares at a price of 72.5 pence per share, following the authority granted at its Annual General Meeting. This move aligns with its decision to cease an agreement with Zeus Capital Limited for share purchases, opting instead for ad hoc buybacks. The transaction leaves the company’s issued share capital unchanged, with total voting rights now at 7,921,494. This strategic financial maneuver could impact shareholder calculations under FCA rules and reflects the company’s adaptive approach to managing its equity structure.

Touchstar Announces Strategic Share Repurchase

Touchstar plc announced the repurchase of 100,000 of its ordinary shares, marking a strategic shift from its previous agreement with Zeus Capital Limited to conduct share purchases. This move, executed under the authority granted at the Company’s Annual General Meeting, allows Touchstar to manage share buybacks on an ad hoc basis, potentially impacting shareholder calculations under the FCA’s Disclosure Guidance and Transparency Rules.

Touchstar plc Announces Strategic Share Repurchase

Touchstar plc announced the repurchase of 41,734 ordinary shares, aligning with its decision to cease an irrevocable agreement with Zeus Capital Limited for share purchases. This move allows the company to conduct share buybacks on an ad hoc basis, maintaining its issued share capital at 8,475,077 with total voting rights now at 8,096,494. The repurchase reflects a strategic shift in the company’s approach to managing its shares, potentially impacting shareholder calculations under the FCA’s rules.

Touchstar Executes Share Buyback Program

Touchstar plc has executed a share buyback program, purchasing 6,563 ordinary shares at prices ranging from 77 to 82 pence per share. This transaction, part of a previously announced buyback program, leaves the company’s issued share capital unchanged at 8,475,077, with 336,849 shares now held in treasury. The total voting rights in the company are now 8,138,228, which shareholders can use for determining interest notifications under regulatory guidelines.

Touchstar plc Executes Share Buyback Program

Touchstar plc has repurchased 4,155 ordinary shares as part of its share buyback program, maintaining its issued share capital at 8,475,077 shares. This transaction, executed through Zeus Capital Limited, reflects Touchstar’s ongoing strategy to manage its share capital and potentially enhance shareholder value.

Touchstar PLC Reports Interim Results Amidst Strategic Transformation

Touchstar PLC announced its interim results for the first half of 2025, revealing a slight decrease in revenue compared to the previous year, attributed to the timing of major installations. Despite a decline in gross margins due to increased costs, the company is undergoing significant transformation under new leadership, focusing on restructuring and expanding its market presence. The order book has increased by 11%, and the company anticipates stronger performance in the second half of the year, supported by a strategic focus on enhancing growth prospects and operational efficiency.