Neto (NTO) AI Stock Analysis

• Market Cap: ₪972.44M
• Dividend Yield: N/A
• Average Volume (3M): 3.85K
• Price to Earnings (P/E): 13.0
• Beta (1Y): 0.60
• Revenue Growth: 8.20%
• EPS Growth: -12.69%
• Country: IL
• Employees: 1,367
• Sector: Services
• Sector Strength: N/A
• Industry: Food Distribution
• EPS (TTM): N/A
• Shares Outstanding: 3,719,614
• 10 Day Avg. Volume: 3,939
• 30 Day Avg. Volume: 3,851
• PEG Ratio: 0.05
• Price to Book (P/B): 0.98
• Price to Sales (P/S): 0.07
• P/FCF Ratio: 1.38
• 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: 72 Outperform
• Price Target: 29,770.00 ▲(26.20% Upside)

Neto's stock score is primarily driven by strong technical indicators, suggesting bullish momentum. Financial performance is a concern due to low profitability and negative cash flows, which are partially offset by reasonable valuation metrics. The absence of earnings call and corporate events data limits additional insights.

Positive Factors

Recurring subscription model

A subscription-first revenue mix creates predictable, recurring cash inflows and higher customer lifetime value. This supports durable revenue visibility, enables tiered upsell of premium features and integrations, and underpins scalable unit economics as the platform grows.

Consistent revenue growth

Sustained top-line expansion indicates continued product-market fit among merchants and adoption of Neto's platform. Steady revenue growth allows fixed-cost dilution, supports reinvestment in product and partnerships, and provides a foundation for longer-term margin improvement.

Strong return on equity

A high ROE signals effective use of shareholder capital and operational leverage. Over a multi-month horizon, this suggests management can extract returns from invested equity, which aids capital allocation decisions and can sustain investor confidence if cash generation improves.

Negative Factors

Negative operating cash flow

Persistently negative operating and free cash flows indicate the business is not yet converting accounting profits into sustainable cash, increasing reliance on external financing. This constrains reinvestment capacity, raises liquidity risk, and pressures balance sheet flexibility over the medium term.

Elevated leverage

A relatively high debt load and low equity ratio leave the company more exposed to interest-rate or financing-cost shocks. Leverage limits strategic optionality, increases fixed cash outflows, and elevates refinancing and covenant risk during periods of weaker cash conversion.

Low net profit margin

Very thin net margins provide limited buffer against cost inflation or competitive pressure and make long-term profitability vulnerable. Even with revenue growth, low net conversion restricts free cash generation and reduces flexibility to invest in product, sales, or margins expansion.

Neto Business Overview & Revenue Model

Company Description

Neto M.E Holdings Ltd. produces, processes, imports, markets, and distributes a range of food products in Israel. The company offers frozen, refrigerated, fresh, and processed meat, including chicken and turkey; grilled meat products, such as hamburgers, kebabs, steaks, sausages, skewers, and others; ground meat products comprising beef, lamb, and veal; and meat products for cooking, such as calf goulash, roasted veal, faux-filet, kishke, and roast beef, as well as instant meals, including shawarma, readymade schnitzel, chicken rings, and others under the Tibon Veal brand. It also provides frozen, fresh, live, and smoked fish products, including whole fish, fish fillets, fish steaks, kosher, fish cutlets, and fish salads under the Delidag brand; canned tuna and frozen smoked salmon, canned mushrooms, fruits, sauces, vegetables, pasta, rice, and granola products under the Williger brand; frozen bakery products comprising bourekas, meat and dairy pastries, pastries from the Yemenite cuisine, pizzas, and others under the Three Bakers brand; ready-to-eat noodle meals under the Magic brand; and non-dairy and whipped creams, as well as cakes under the Rich's brand name. In addition, the company offers catering services, rural accommodations, meat workshops, meals for carnivores, and frozen meat products, as well as operates grill restaurant chain under the El Gaucho brand name. Neto M.E Holdings Ltd. was founded in 1940 and is headquartered in Kiryat Malachi, Israel.

How the Company Makes Money

Neto generates revenue through a subscription-based model, where businesses pay monthly fees to access its eCommerce platform and associated features. Key revenue streams include subscription fees for different service tiers, transaction fees on sales processed through the platform, and additional charges for premium features, such as advanced analytics and custom integrations. The company also forms strategic partnerships with payment processors, logistics companies, and other service providers, which can enhance its service offerings and create additional revenue opportunities through referral fees or co-marketing arrangements.

Neto Financial Statement Overview

Summary

Neto shows consistent revenue growth and operational efficiency improvements, but faces challenges with low net profit margins and negative cash flows. High debt levels pose financial risks, and liquidity concerns are evident due to negative operating and free cash flows.

Income Statement

Neto has shown consistent revenue growth, with a TTM growth rate of 2.88%. The gross profit margin has improved slightly to 13.84% in TTM, indicating efficient cost management. However, the net profit margin remains low at 1.70%, suggesting challenges in translating revenue growth into net income. EBIT and EBITDA margins have improved, reflecting better operational efficiency.

Balance Sheet

The company's debt-to-equity ratio has decreased to 1.29 in TTM, showing improved leverage management. However, it remains relatively high, indicating potential financial risk. Return on equity is strong at 22.75%, suggesting effective use of equity. The equity ratio is low, highlighting a reliance on debt financing.

Cash Flow

Neto's cash flow situation is concerning, with negative operating and free cash flows in TTM. The free cash flow growth rate is significantly negative, indicating cash flow challenges. The operating cash flow to net income ratio is low, suggesting inefficiencies in converting income into cash.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	5.08B	4.81B	4.38B	4.20B	3.55B	3.24B
Gross Profit	692.49M	655.39M	482.54M	502.60M	532.90M	479.94M
EBITDA	397.93M	348.37M	202.13M	229.60M	316.78M	333.56M
Net Income	74.50M	81.40M	43.03M	61.59M	91.49M	127.28M
Balance Sheet
Total Assets	2.53B	2.07B	1.93B	1.92B	1.69B	1.65B
Cash, Cash Equivalents and Short-Term Investments	9.13M	38.65M	6.28M	8.46M	19.42M	88.36M
Total Debt	540.40M	449.29M	649.27M	785.80M	595.57M	381.39M
Total Liabilities	1.23B	967.95M	983.26M	1.06B	982.54M	781.29M
Stockholders Equity	456.86M	354.07M	270.65M	231.94M	159.23M	364.65M
Cash Flow
Free Cash Flow	-100.32M	252.56M	140.90M	-113.69M	49.06M	107.05M
Operating Cash Flow	-59.33M	296.39M	208.92M	-69.17M	71.12M	127.70M
Investing Cash Flow	83.49M	-36.26M	-64.40M	-41.79M	49.03M	120.83M
Financing Cash Flow	-28.29M	-234.50M	-147.08M	106.00M	-194.36M	-179.29M

Neto Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 23590.00
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Negative
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For IL:NTO, the sentiment is Positive. The current price of 23590 is below the 20-day moving average (MA) of 26339.00, below the 50-day MA of 24397.20, and above the 200-day MA of 20388.65, indicating a bullish trend. The MACD of 900.04 indicates Negative momentum. The RSI at 83.99 is Negative, neither overbought nor oversold. The STOCH value of 93.74 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for IL:NTO.

Neto Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
NTO	72 Outperform	₪972.44M	13.02	―	―	8.20%	-12.69%
TTAM	67 Neutral	₪1.20B	17.73	―	1.69%	9.07%	38.76%
VCTR	62 Neutral	₪774.54M	26.19	―	3.30%	-1.61%	-45.19%
GLRS	56 Neutral	₪562.73M	8.95	―	6.97%	―	―
Sector *	55 Neutral	$13.29B	17.42	10.03%	0.93%	7.13%	-12.93%