Informatica (INFA) AI Stock Analysis

• Market Cap: $5.95B
• Dividend Yield: N/A
• Average Volume (3M): 3.48M
• Price to Earnings (P/E): 582.5
• Beta (1Y): 0.99
• Revenue Growth: 2.81%
• EPS Growth: N/A
• Country: US
• Employees: 5,200
• Sector: Technology
• Sector Strength: 46
• Industry: Software - Infrastructure
• EPS (TTM): 0.03
• Shares Outstanding: 258,549,530
• 10 Day Avg. Volume: 6,284,227
• 30 Day Avg. Volume: 3,482,538
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): 3.31
• Price to Cash Flow (P/CF): 12.90
• P/FCF Ratio: 13.00
• 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: $22.13
• Price Target Upside: 28.96% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 15

Informatica's overall score reflects solid financial performance and promising growth in cloud subscriptions. However, the high P/E ratio and technical bearish indicators suggest caution. The mixed sentiment from the earnings call further tempers the outlook, with positive developments in cloud growth counterbalanced by challenges in renewal rates and GAAP revenue.

Positive Factors

Cash Flow

The company generated adjusted unlevered FCF of $144.0 million, ahead of prior estimate.

Cloud Subscription

Cloud subscription ARR grew 36.1% YOY to $747.8 million, beating prior estimate.

Financial Performance

Slightly better-than-forecast Q3 cloud and total revenue, with solid upside to margins.

Negative Factors

Churn and Renewals

Higher churn and shorter contract lengths are negatively impacting ARR growth and are harder to fix.

Guidance and Forecasts

The company missed Q4 guidance and guided FY25 well below consensus.

Revenue Growth

Customers are increasingly shifting towards shorter duration Self-Managed contracts, posing a headwind to overall Revenue growth.

Informatica Business Overview & Revenue Model

Company Description

Informatica Inc. develops an artificial intelligence-powered platform that connects, manages, and unifies data across multi-cloud, hybrid systems at enterprise scale in the United States. The company's platform includes a suite of interoperable data management products, including data integration products to ingest, transform, and integrate data; API and application integration products that enable users to create and manage APIs and integration processes for app-to-app synchronization, business process orchestration, B2B partner management, application development, and API management; data quality products to profile, cleanse, standardize, and enrich data to deliver accurate, complete, and consistent data sets for analytics, data science, governance, and other initiatives; and master data management products to create an authoritative single source of truth of business-critical data to reduce data related errors and remove redundancies. Its platform also includes customer and business 360 products to create, visualize, and browse comprehensive 360-degree views of business-critical data; data catalog products that enables customers to quickly find, access, and understand enterprise data using a simple Google-like search experience; and governance and privacy products that help users govern data, enable compliance with regulatory and corporate policies, and drive broader data consumption. The company also offers maintenance and professional services. Informatica Inc. was founded in 1993 and is headquartered in Redwood City, California.

How the Company Makes Money

Informatica generates revenue through the sale of its software products and services, which are offered through a subscription-based model. Key revenue streams include licensing fees for its cloud-based data management solutions, professional services for implementation and support, and maintenance contracts. The company also benefits from strategic partnerships with cloud service providers and technology vendors, which help expand its market reach and customer base. Informatica's focus on innovation and its ability to adapt to the evolving needs of data-driven organizations play a significant role in sustaining its revenue growth.

Informatica Financial Statement Overview

Summary

Informatica demonstrates strong revenue growth and improved profitability, with significant strides in cash flow generation and leverage reduction. While profitability metrics have turned positive, sustaining this trajectory will be key in the competitive software industry. The balance sheet's strengthened equity position and reduced debt levels provide a stable financial foundation.

Income Statement

Informatica has shown consistent revenue growth with a TTM increase of 2.81% from the previous year. The gross profit margin stands strong at 74.43%, indicating efficient cost management. The net profit margin has improved significantly to 0.61% in the TTM from a negative margin in previous years, reflecting a turnaround in profitability. EBIT and EBITDA margins are at 8.04% and 16.37% respectively, showing an improvement in operational efficiency.

Balance Sheet

The company has a solid equity position, with an equity ratio of 43.69%. The debt-to-equity ratio has decreased significantly to 0.03 in the TTM, showing reduced leverage and a stronger balance sheet. Return on equity has turned positive at 0.43% from negative in prior years, indicating improved profitability relative to shareholders' equity.

Cash Flow

Informatica's free cash flow has grown by an impressive 56.19% in the TTM, showcasing robust cash generation capabilities. The operating cash flow to net income ratio is 41.27, highlighting strong cash conversion from earnings. The free cash flow to net income ratio stands at 40.86, indicating efficient cash flow management.

Breakdown
Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
1.64B	1.60B	1.51B	1.44B	1.32B
	Gross Profit
1.31B	1.26B	1.16B	1.11B	1.01B
	EBIT
127.05M	33.56M	43.82M	87.56M	16.11M
	EBITDA
338.52M	241.02M	258.41M	59.91M	273.18M
	Net Income Common Stockholders
9.93M	-125.28M	-53.67M	-99.93M	-167.89M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
1.23B	992.27M	716.13M	496.42M	362.73M
	Total Assets
5.28B	5.20B	4.97B	4.99B	5.07B
	Total Debt
70.21M	1.89B	1.91B	1.93B	2.88B
	Net Debt
-842.25M	1.15B	1.42B	1.48B	2.54B
	Total Liabilities
2.97B	2.99B	2.92B	3.00B	3.91B
	Stockholders Equity
2.31B	2.21B	2.05B	1.98B	1.17B
Cash Flow		Free Cash Flow
405.91M	259.80M	194.59M	217.87M	153.92M
	Operating Cash Flow
409.85M	266.35M	200.06M	228.68M	167.75M
	Investing Cash Flow
-70.71M	-55.88M	-185.96M	-32.41M	-52.51M
	Financing Cash Flow
-146.21M	21.37M	40.89M	-86.37M	70.29M

Informatica Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 17.16
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For INFA, the sentiment is Neutral. The current price of 17.16 is below the 20-day moving average (MA) of 17.41, below the 50-day MA of 18.64, and below the 200-day MA of 23.83, indicating a neutral trend. The MACD of -0.42 indicates Negative momentum. The RSI at 48.39 is Neutral, neither overbought nor oversold. The STOCH value of 57.27 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for INFA.

Informatica Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
FOUR	76 Outperform	$6.86B	26.20	31.22%	―	29.86%	128.19%
SRAD	74 Outperform	$7.50B	200.48	3.92%	―	26.10%	0.16%
CCCS	68 Neutral	$5.67B	212.07	1.38%	―	9.05%	―
S	64 Neutral	$5.39B	―	-17.68%	―	32.25%	20.56%
INFA	61 Neutral	$5.95B	582.51	0.44%	―	2.81%	―
GTLB	59 Neutral	$6.87B	―	-0.20%	―	30.93%	99.45%
Sector *	59 Neutral	$9.97B	10.09	-6.54%	3.08%	7.41%	-11.60%

Informatica Corporate Events

Informatica Appoints New Chief Accounting Officer

Informatica Inc. announced a leadership transition within its finance department, appointing Francis Santiago as the new Group Vice President and Chief Accounting Officer, effective March 5, 2025. Santiago, who has been with the company for over 13 years, succeeds Mark Pellowski, who is retiring after 20 years of service. Santiago’s compensation package includes a base salary of $390,500, a target bonus, and equity awards, aligning with the company’s executive compensation practices.

Informatica’s Board Changes Amid Financial Reporting

On February 10, 2025, Brian Ruder resigned from Informatica’s Board of Directors, and Alex Vander Linde was appointed as a new director, nominated by Permira. Informatica reported its financial results for the fourth quarter and full-year 2024, highlighting a 34% increase in Cloud Subscription ARR. The company faced challenges in the fourth quarter, including lower renewal rates and revenue impacts due to currency fluctuations. Despite these challenges, Informatica aims to reach $1 billion in Cloud Subscription ARR by the end of 2025. The company is recognized for its leadership in data management and innovation, expanding partnerships and launching new products in the AI and cloud spaces.