Indra Sistemas (ISMAY) AI Stock Analysis

• Market Cap: $12.87B
• Dividend Yield: 0.53%
• Average Volume (3M): 245.00
• Price to Earnings (P/E): 26.5
• Beta (1Y): 0.13
• Revenue Growth: 8.96%
• EPS Growth: 61.02%
• Country: US
• Employees: 60,598
• Sector: Technology
• Sector Strength: 88
• Industry: Information Technology Services
• EPS (TTM): 0.48
• Shares Outstanding: 353,308,000
• 10 Day Avg. Volume: 482
• 30 Day Avg. Volume: 245
• PEG Ratio: 0.02
• Price to Book (P/B): 1.11
• Price to Sales (P/S): 1.24
• P/FCF Ratio: -58.90
• Enterprise Value/Market Cap: 0.92
• Enterprise Value/Revenue: 1.95
• Enterprise Value/Gross Profit: 8.21
• Enterprise Value/Ebitda: 17.75
• 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: $40.00 ▲(19.98% Upside)
• Action: Reiterated Date: 03/03/26
• Date: Action: Reiterated 03/03/26

The score is driven by strong technical uptrend signals and constructive earnings-call outlook (backlog/order intake strength and sizable defense awards). Financial performance is solid but tempered by the latest-year revenue contraction, weaker free cash flow momentum, and higher leverage signals. Valuation is mixed, with a moderate P/E partially offset by a high dividend yield.

Positive Factors

Defense backlog and large awards

A sizable, growing defense backlog and €7.8bn of special modernization awards give long-duration revenue visibility. Large government programs create multi-year contracted work, higher switching costs and sticky in‑service support revenue, supporting durable earnings.

Multi-year profitability improvement and cash generation

Sustained improvement from loss-making years into multi-year profitability and positive operating cash flow demonstrate earnings quality and conversion ability. This underpins reinvestment capacity and resilience through program cycles.

Strategic investments and AI platform (IndraMind)

Heavy R&D commitment and rollout of IndraMind plus planned capacity investments in Spain and the U.S. support product differentiation, higher-margin platform offerings, and international scaling—strengthening long-term competitive positioning.

Negative Factors

Step-up in debt and leverage swing

The move from net cash to net debt and a material step-up in total debt increases financial risk and reduces balance sheet flexibility. Higher leverage can constrain funding for organic growth and make the company more sensitive to rate or cyclical shocks.

Weakened free cash flow momentum

Declining free cash flow despite profitability gains suggests cash conversion stress from investments and working capital. Persistent FCF weakness would limit ability to fund capex, R&D, dividends or debt reduction without external financing.

Working capital pressure from consolidation

Rising DSO tied to consolidation indicates strained receivables and cash conversion. If sustained, higher working capital needs can elevate funding requirements, amplify leverage effects and compress available liquidity for strategic spending.

Indra Sistemas Business Overview & Revenue Model

Company Description

Indra Sistemas, S.A. operates as a technology and consulting company worldwide. It designs, develops, produces, integrates, operates, maintains, repairs, and markets systems, solutions, and services based on the use of information technologies, electronics, and communication; and for surveillance and security control of facilities. It also researches, engineers, designs, develops, manufactures, markets, installs, maintains, and repairs devices, equipment, and systems for data communication, encryption systems, encryption, beacon, and command and control center; manages, executes, commercializes, and sells system engineering services for the defense industry; and provides engineering and maintenance services for air defense systems and other related systems, as well as architectural and engineering technical services. In addition, it offers systems to aid navigation and landing, and air traffic control systems; outsources business processes; delivers document management services and mortgage management; realizes measures for the settlement and registration; and manages digitalization and data capture. Further, it provides business consulting, technology and solutions consulting, administration, management, support, advisory, telecommunications, mobile telephony, credit card processing, and energy transport and distribution network manufacture services; engineering and consultancy services for environment, transport, construction, water, and industry areas; and digital agency, web communication and marketing, securities, computer programing, aerodrome air traffic, radio communication security, port infrastructure, airline training and coaching, and project services. Additionally, it researches and develops autonomous air systems and solutions in unmanned systems; and develops and produces aircraft, tactical communication systems, and toll and traffic control and management systems. Indra Sistemas, S.A. was founded in 1921 and is headquartered in Alcobendas, Spain.

How the Company Makes Money

Indra Sistemas generates revenue primarily through the provision of technology services and solutions to businesses and governments. Its revenue model is diversified across several key streams, including software licensing, project-based consulting services, and long-term contracts for system integration. The company also benefits from recurring revenue through maintenance contracts and support services. Significant partnerships with various public and private sector organizations enhance Indra's earnings potential, as well as its involvement in large-scale infrastructure projects and digital transformation initiatives across different industries.

Indra Sistemas Financial Statement Overview

Summary

Multi-year profitability improvement and consistently positive operating cash flow/free cash flow support a solid base. Offsetting this, the latest year shows a sharp revenue decline, negative free cash flow growth, and a notable step-up in debt/asset base, increasing financial risk if growth does not reaccelerate.

Income Statement

Profitability has improved materially since 2020’s loss-making year, with steady multi-year revenue growth from 2021–2024 and expanding operating profit. Net income also stepped up meaningfully into 2024. The key drawback is the most recent annual period (2025) showing a sharp revenue decline versus 2024, which raises concerns around growth durability even though earnings remained solid.

Balance Sheet

Leverage improved substantially from 2020–2024, with debt relative to equity moving down and equity returns remaining strong in 2022–2024. However, the latest annual snapshot (2025) shows a large step-up in total debt and a much larger asset base, suggesting higher financial risk and a potentially more leveraged structure than the prior year even with higher equity.

Cash Flow

Cash generation is consistently positive, with operating cash flow and free cash flow rising from 2020 through 2025 in absolute terms, supporting financial flexibility. Free cash flow conversion versus net income was solid in 2021–2024, indicating earnings quality. Offsetting this, free cash flow growth turned negative in 2025, signaling some near-term pressure on cash momentum.

Breakdown	TTM	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	6.08B	5.24B	4.84B	4.34B	3.85B	3.39B
Gross Profit	1.44B	1.24B	1.68B	1.08B	1.29B	1.04B
EBITDA	667.71M	567.81M	545.28M	455.06M	388.86M	340.79M
Net Income	447.93M	418.63M	277.54M	205.75M	171.90M	143.37M
Balance Sheet
Total Assets	6.48B	9.35B	4.96B	4.72B	4.54B	4.54B
Cash, Cash Equivalents and Short-Term Investments	704.40M	975.78M	556.58M	656.29M	974.10M	1.26B
Total Debt	1.01B	1.75B	850.87M	1.04B	1.24B	1.58B
Total Liabilities	5.03B	7.23B	3.64B	3.59B	3.53B	3.69B
Stockholders Equity	1.44B	1.73B	1.30B	1.12B	987.01M	820.17M
Cash Flow
Free Cash Flow	486.87M	429.50M	339.89M	316.81M	296.14M	295.48M
Operating Cash Flow	621.59M	471.84M	450.89M	379.52M	350.26M	344.64M
Investing Cash Flow	-110.20M	-869.27M	-81.91M	-274.27M	-55.27M	-26.77M
Financing Cash Flow	-207.90M	778.07M	-333.72M	-439.63M	-605.62M	-269.20M

Indra Sistemas Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 33.34
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ISMAY, the sentiment is Positive. The current price of 33.34 is above the 20-day moving average (MA) of 31.24, above the 50-day MA of 31.18, and above the 200-day MA of 24.85, indicating a bullish trend. The MACD of 1.10 indicates Negative momentum. The RSI at 67.97 is Neutral, neither overbought nor oversold. The STOCH value of 97.44 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for ISMAY.

Indra Sistemas Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
EXLS	74 Outperform	$4.88B	20.21	27.25%	―	14.43%	29.86%
G	73 Outperform	$6.83B	12.70	22.37%	1.41%	7.40%	-14.45%
ISMAY	71 Outperform	$12.87B	26.46	28.45%	0.53%	8.96%	61.02%
CACI	69 Neutral	$13.80B	26.75	13.18%	―	12.61%	11.85%
EPAM	68 Neutral	$7.53B	20.68	10.34%	―	14.26%	-15.49%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
KD	53 Neutral	$2.78B	11.75	21.77%	―	-1.90%	―