Touchstar (TST) AI Stock Analysis

• Market Cap: £4.83M
• Dividend Yield: 5.42%
• Average Volume (3M): 8.42K
• Price to Earnings (P/E): 141.9
• Beta (1Y): 0.08
• 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: N/A
• Number of Analyst Covering: 0
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 68 Neutral
• Price Target: 66.00p ▲(10.00% 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

Free cash flow generation

Exceptionally strong free cash flow growth and high operating cash-to-income ratios indicate durable cash conversion. This provides financial flexibility for R&D, buybacks, or acquisitions, and cushions the business against cyclical downturns while funding strategic initiatives without heavy external financing.

Low leverage, healthy equity base

Very low leverage and a strong equity ratio reduce solvency risk and preserve borrowing capacity. Combined with a mid-teens ROE, this capital structure supports sustained investment and resilience, enabling the company to pursue growth or weather shocks with limited financial strain.

Recurring subscription and services revenue model

A mix of subscription, maintenance and services revenue creates recurring cash streams and cross-sell opportunities. Partnerships with telcos and integrators extend distribution and lower customer acquisition costs, supporting predictable revenue and higher lifetime value over the medium term.

Negative Factors

Declining operating and net margins

Worsening operating and net margins alongside slight revenue decline signal pressure on profitability and potential cost or pricing challenges. Sustained margin erosion can limit reinvestment capacity, weaken returns to shareholders, and indicate competitive or structural issues in monetization.

Severe EPS contraction

A near-total collapse in EPS is a material deterioration in earnings power and may reflect one-off charges, margin compression, or weaker demand. Persistent EPS weakness undermines investor confidence and restricts ability to fund growth internally or maintain dividend policies over time.

Small scale and limited workforce

A very small headcount constrains capacity for sales, product development, and large enterprise deployments. Limited scale can slow go-to-market execution, increase concentration risk on key personnel, and limit ability to pursue multiple large clients or rapid geographic expansion.

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: Negative
• 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 61.07, below the 50-day MA of 71.79, and below the 200-day MA of 78.89, indicating a bearish trend. The MACD of -3.11 indicates Negative momentum. The RSI at 27.05 is Positive, neither overbought nor oversold. The STOCH value of 47.30 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
TST	68 Neutral	£4.83M	141.86	1.05%	5.42%	0.09%	-94.11%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
NET	61 Neutral	£201.17M	48.16	9.59%	0.80%	22.80%	-32.13%
GETB	60 Neutral	£44.86M	268.18	―	―	1.73%	-68.87%
TIDE	58 Neutral	£5.26M	―	―	―	―	―
CKT	57 Neutral	£21.06M	-6.79	-29.25%	―	10.00%	34.02%
PCIP	56 Neutral	£38.76M	891.67	―	―	25.15%	―

Touchstar Corporate Events

Touchstar PLC Announces Restructuring Amid Economic Challenges

Touchstar PLC has announced a trading update for the fiscal year ending December 2025, revealing that revenue is expected to fall below market expectations due to economic softness and customer hesitancy. Despite this, the company has undergone significant restructuring under a new CEO, aiming to strengthen its foundations and drive sustainable growth. Exceptional costs related to management reorganization and changes in software development cost treatment have impacted profitability. Looking forward, Touchstar plans to reposition its business, enhance sales capabilities, and explore acquisition opportunities, with modest revenue growth anticipated in 2026 and a more substantial increase expected in subsequent years.

The most recent analyst rating on (GB:TST) stock is a Hold with a £85.00 price target. To see the full list of analyst forecasts on Touchstar stock, see the GB:TST Stock Forecast page.

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.

The most recent analyst rating on (GB:TST) stock is a Hold with a £75.00 price target. To see the full list of analyst forecasts on Touchstar stock, see the GB:TST Stock Forecast page.

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.

The most recent analyst rating on (GB:TST) stock is a Hold with a £95.00 price target. To see the full list of analyst forecasts on Touchstar stock, see the GB:TST Stock Forecast page.