Isrotel (ISRO) AI Stock Analysis

• Market Cap: 10.67B
• Dividend Yield: 0.66%
• Average Volume (3M): 70.63K
• Price to Earnings (P/E): 41.7
• Beta (1Y): 0.96
• Revenue Growth: 17.96%
• EPS Growth: -12.66%
• Country: IL
• Employees: 5,500
• Sector: Services
• Sector Strength: N/A
• Industry: Travel Lodging
• EPS (TTM): N/A
• Shares Outstanding: 59,984,016
• 10 Day Avg. Volume: 81,029
• 30 Day Avg. Volume: 70,628
• PEG Ratio: 0.53
• Price to Book (P/B): 1.92
• Price to Sales (P/S): 2.51
• P/FCF Ratio: 167.92
• 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: 71 Outperform
• Price Target: 19,647.00 ▲(18.00% Upside)

Isrotel's stock score is driven by strong technical indicators and solid financial performance, despite a high valuation. The upward trend in stock price and operational efficiency are significant positives, while the high P/E ratio and declining free cash flow present challenges. Investors should monitor cost management and cash flow improvements.

Positive Factors

Revenue Growth Trajectory

Sustained top-line expansion reflects strong demand for Isrotel’s hospitality offerings and effective distribution. Persistent revenue growth supports economies of scale, recurring room and F&B income, and provides a stable base to fund reinvestment and strategic expansion over the next several quarters.

Robust Operating Margins

Healthy gross and EBITDA margins indicate durable operational efficiency and pricing power across hotels, spas and events. Strong margins improve cash generation potential, enable reinvestment in assets and services, and help the company better withstand cyclical tourism swings over the medium term.

Balanced Capital Structure

Moderate leverage and a ~50% equity ratio provide financial flexibility to fund refurbishments or selective expansion without excessive refinancing risk. This balanced structure supports stable credit capacity and reduces vulnerability to interest rate cycles versus a highly levered peer.

Negative Factors

Deteriorating Free Cash Flow

A dramatic fall in free cash flow weakens the company’s ability to fund capex, service debt, pay dividends, or invest in growth without external financing. If sustained, this reduces financial flexibility and could necessitate higher leverage or asset sales, harming long-term strategic optionality.

Negative EPS Trend

Declining EPS despite revenue gains signals margin pressure, one-off costs, or higher financing expense. Persistent EPS contraction undermines retained earnings growth and shareholder returns, limiting the company’s ability to self-fund expansion and eroding confidence in profit sustainability.

Slight Margin Compression / Cost Pressures

Reported margin deterioration and a modest fall in ROE point to rising operating costs or pricing constraints. If structural (labor, energy, procurement), these pressures can persist and reduce cash margins, limiting reinvestment capacity and long-term profitability without cost remediation.

Isrotel Business Overview & Revenue Model

Company Description

Isrotel Ltd. operates and manages a chain of hotels in Israel. It operates operates 21 hotels with various facilities comprising rooms and suites, lobby, dining rooms, restaurants, conference halls, business lounge, pubs, shops, swimming pools, health and fitness clubs, spas, wine bars, movie theaters, etc. The company also provides various vacation facilities. Isrotel Ltd. was incorporated in 1980 and is based in Tel Aviv, Israel.

How the Company Makes Money

Isrotel generates revenue primarily through its hotel and resort operations, which include room bookings, food and beverage services, and additional amenities such as spa and recreational activities. The company benefits from a strong occupancy rate, especially during peak tourist seasons, which drives significant income from its accommodations. Furthermore, Isrotel engages in event hosting and conference services, providing venues for corporate events and social gatherings, thereby creating another revenue stream. Partnerships with travel agencies, tour operators, and online booking platforms enhance its visibility and customer reach, contributing to steady bookings. Additionally, Isrotel may also generate income through property management and real estate investments, capitalizing on the growing tourism market in Israel.

Isrotel Financial Statement Overview

Summary

Isrotel shows strong revenue growth and operational efficiency, but declining profit margins and cash flow challenges pose risks. The balance sheet remains stable, but increased leverage and reduced ROE warrant attention. Overall, the company is in a solid position but should focus on improving cash flow management and profitability.

Income Statement

Isrotel has demonstrated strong revenue growth with a TTM increase of 17.4%. However, there is a decline in profit margins, with the gross profit margin decreasing from 43.7% to 40.3% and the net profit margin from 15.9% to 12.5% over the past year. Despite this, the company maintains solid EBIT and EBITDA margins, indicating operational efficiency.

Balance Sheet

The company's debt-to-equity ratio has increased slightly to 0.67, indicating moderate leverage. Return on equity has decreased to 9.9%, reflecting reduced profitability. However, the equity ratio remains healthy, suggesting a stable financial position.

Cash Flow

Isrotel's cash flow performance is concerning, with a significant decline in free cash flow growth and a negative free cash flow to net income ratio. The operating cash flow to net income ratio has also decreased, indicating potential cash flow management issues.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	2.09B	1.92B	1.80B	1.87B	1.61B	743.97M
Gross Profit	836.03M	837.91M	751.48M	765.84M	696.42M	214.57M
EBITDA	593.65M	617.09M	527.80M	515.63M	492.97M	126.68M
Net Income	254.43M	303.66M	233.42M	252.79M	250.64M	-24.50M
Balance Sheet
Total Assets	5.31B	4.81B	4.23B	4.07B	3.56B	3.04B
Cash, Cash Equivalents and Short-Term Investments	248.61M	419.84M	518.50M	412.86M	377.71M	7.63M
Total Debt	1.68B	1.40B	1.27B	1.24B	1.11B	1.21B
Total Liabilities	2.62B	2.28B	1.99B	2.03B	1.81B	1.68B
Stockholders Equity	2.66B	2.51B	2.22B	2.03B	1.73B	1.35B
Cash Flow
Free Cash Flow	189.37M	28.61M	241.15M	416.79M	462.51M	-131.81M
Operating Cash Flow	517.75M	573.81M	488.50M	554.83M	545.18M	110.80M
Investing Cash Flow	-173.36M	-591.94M	-480.77M	-317.44M	-84.15M	-308.82M
Financing Cash Flow	-356.77M	-17.07M	-136.12M	-254.21M	-89.43M	177.05M

Isrotel Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 16650.00
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Negative
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For IL:ISRO, the sentiment is Positive. The current price of 16650 is above the 20-day moving average (MA) of 16208.50, above the 50-day MA of 14379.80, and above the 200-day MA of 11103.07, indicating a bullish trend. The MACD of 859.21 indicates Negative momentum. The RSI at 73.91 is Negative, neither overbought nor oversold. The STOCH value of 74.32 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for IL:ISRO.

Isrotel Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
ISRO	71 Outperform	10.67B	41.73	―	0.66%	17.96%	-12.66%
HLMS	59 Neutral	681.95M	20.44	―	5.30%	7.70%	-34.56%
FTAL	56 Neutral	11.19B	649.59	0.73%	―	3.84%	-94.37%
Sector *	55 Neutral	$13.29B	17.42	10.03%	0.93%	7.13%	-12.93%
SKLN	38 Underperform	88.16M	-0.58	―	―	-33.82%	6.83%