Stg (STG) AI Stock Analysis

• Market Cap: 325.87M
• Dividend Yield: 5.38%
• Average Volume (3M): 5.37K
• Price to Earnings (P/E): 12.3
• Beta (1Y): 0.35
• Revenue Growth: 12.03%
• EPS Growth: 35.37%
• Country: IL
• Employees: 63
• Sector: Services
• Sector Strength: N/A
• Industry: Technology Distributors
• EPS (TTM): N/A
• Shares Outstanding: 4,789,394
• 10 Day Avg. Volume: 2,374
• 30 Day Avg. Volume: 5,373
• PEG Ratio: 1.04
• Price to Book (P/B): 1.28
• Price to Sales (P/S): 1.05
• P/FCF Ratio: 7.72
• 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: 69 Neutral
• Price Target: 7,454.00 ▲(12.48% Upside)

Stg's overall stock score is driven by strong financial performance and attractive valuation metrics. The company's robust profitability and low leverage are significant strengths. However, technical analysis indicates bearish momentum, which is a risk factor. The lack of earnings call and corporate events data means these components do not influence the score.

Positive Factors

Strong profitability margins

Sustained gross margin near 32% and net margin ~12% indicate durable pricing power and efficient cost control in distribution. Healthy margins support reinvestment, dividend capacity and resilience to input-cost shocks, underpinning long-term cash generation.

Very low leverage and solid equity base

Extremely low debt and a high equity ratio give the company strong financial flexibility to fund growth or weather downturns without distress. Combined with mid-teens ROE, the capital structure supports stable operations and strategic optionality over the medium term.

Consistent revenue growth

Multi-year top-line expansion shows ongoing demand for the company's distribution services and market penetration. Steady revenue growth provides a base for margin leverage and scale benefits, supporting sustainable earnings growth and strategic investment capacity.

Negative Factors

Declining free cash flow growth

A >20% drop in FCF growth weakens the firm's ability to fund capex, acquisitions or higher dividends from operating earnings. If the decline reflects working capital swings or lower cash conversion, it poses a lasting constraint on financial flexibility and reinvestment.

Slight increase in total debt

Although leverage remains low today, a trend of rising indebtedness could erode the company’s strong balance-sheet cushion. Over time incremental debt raises interest exposure and may limit strategic moves or increase refinancing risk if growth stalls.

Limited scale / small headcount

A small workforce suggests limited operational scale and potential constraints on distribution reach, R&D or multi-market expansion. Smaller scale can reduce bargaining power with suppliers and heighten operational concentration risks over the medium term.

Stg Business Overview & Revenue Model

Company Description

STG International Ltd. operates as a reseller of electronic components, equipment, and systems in Israel. The company offers embedded, connectivity, power, RF and passive, cooling, and other systems. It also designs and manufactures industrial computing, defense and security communication equipment, and medical products. The company serves defense, communication, security, medical, industrial, and semiconductor sectors. STG International Ltd. was incorporated in 1965 and is based in Givatayim, Israel.

How the Company Makes Money

Stg generates revenue through a multi-faceted business model that includes software licensing, subscription services, and consulting engagements. The company offers its proprietary software products under a licensing model, allowing clients to pay for the right to use the software on a per-user or enterprise basis. Additionally, STG provides subscription-based services that enable customers to access cloud-based solutions and ongoing updates. Consulting services, which involve tailored data analytics and implementation support, represent another significant revenue stream. Partnerships with major technology providers and collaborations with industry leaders also contribute to STG's earnings by expanding its market reach and enhancing its service offerings.

Stg Financial Statement Overview

Summary

Stg demonstrates strong financial performance with consistent revenue growth and robust profitability metrics. The balance sheet is solid with low leverage, but the decline in free cash flow growth is a concern.

Income Statement

Stg has demonstrated consistent revenue growth over the years, with a notable 3.54% increase in the latest year. The company maintains strong profitability metrics, with a gross profit margin of 31.93% and a net profit margin of 11.86%. EBIT and EBITDA margins are also healthy at 14.95% and 15.91%, respectively, indicating efficient operations and cost management. Overall, the income statement reflects a robust financial performance with positive growth trends.

Balance Sheet

The balance sheet of Stg shows a solid financial position with a low debt-to-equity ratio of 0.07, indicating low leverage and financial risk. The return on equity is strong at 14.45%, reflecting effective use of shareholders' equity to generate profits. The equity ratio stands at 74.57%, suggesting a stable capital structure. However, the slight increase in total debt over the years warrants monitoring.

Cash Flow

Stg's cash flow statement reveals a mixed picture. While the operating cash flow to net income ratio is healthy at 0.61, indicating good cash generation relative to net income, the free cash flow growth rate has declined by 20.43% in the latest year. The free cash flow to net income ratio is nearly 1, suggesting that the company is generating sufficient free cash flow to cover its net income. Overall, cash flow management appears stable but with room for improvement in free cash flow growth.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	194.69M	179.94M	170.73M	142.75M	98.49M	113.42M
Gross Profit	65.71M	57.45M	54.42M	38.70M	28.81M	27.58M
EBITDA	36.58M	28.64M	27.09M	14.10M	9.18M	9.23M
Net Income	21.46M	21.34M	18.40M	16.89M	6.01M	5.33M
Balance Sheet
Total Assets	198.87M	198.03M	184.15M	157.87M	129.50M	111.75M
Cash, Cash Equivalents and Short-Term Investments	71.56M	72.97M	55.03M	29.91M	17.44M	9.50M
Total Debt	9.45M	10.96M	14.91M	21.31M	14.08M	7.16M
Total Liabilities	46.77M	49.70M	57.46M	59.77M	48.17M	36.25M
Stockholders Equity	149.86M	147.70M	126.06M	98.29M	80.71M	74.57M
Cash Flow
Free Cash Flow	22.75M	24.43M	25.14M	4.08M	8.17M	-5.12M
Operating Cash Flow	22.95M	24.53M	25.55M	4.66M	9.21M	-3.29M
Investing Cash Flow	-1.91M	-1.63M	-3.11M	1.48M	-6.90M	-871.00K
Financing Cash Flow	-13.04M	-5.00M	2.56M	6.85M	5.20M	5.78M

Stg Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 6627.00
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For IL:STG, the sentiment is Positive. The current price of 6627 is above the 20-day moving average (MA) of 6220.20, above the 50-day MA of 5949.68, and above the 200-day MA of 5698.08, indicating a bullish trend. The MACD of 243.36 indicates Negative momentum. The RSI at 67.40 is Neutral, neither overbought nor oversold. The STOCH value of 76.26 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for IL:STG.

Stg Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
STG	69 Neutral	325.87M	12.26	―	5.38%	12.03%	35.37%
LUDN	66 Neutral	139.45M	7.46	―	8.27%	-21.65%	-30.92%
Sector *	55 Neutral	$13.29B	17.42	10.03%	0.93%	7.13%	-12.93%