Nexi S.p.A. (NEXI) AI Stock Analysis

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Nexi S.p.A.

(NEXI)

Rating:63Neutral

Price Target:

€5.50

▲(7.84%Upside)

Nexi S.p.A. shows strong revenue growth and strategic advancements as highlighted in the earnings call, which boosts investor confidence. However, financial stability concerns due to rising debt and cash flow challenges weigh on the outlook. Technical indicators provide a mixed view, with valuation suggesting high growth expectations. Overall, the stock reflects potential but with notable risks that need careful management.

Positive Factors

Financial Performance

Nexi's Issuing Solutions, which constitutes 33% of the group revenue, exceeded expectations with a 3.8% organic revenue growth, reaching €311m.

Shareholder Returns

Nexi is enhancing shareholder value through its first dividend proposal, yielding 5.4%, and a €300m share buyback programme.

Negative Factors

Growth Challenges

Merchant Solutions is experiencing a slowdown at a faster pace than anticipated.

Guidance Concerns

The 2025 guidance is weak due to the loss of Banco BPM and contract renegotiations, although it aligns with expectations.

Nexi S.p.A. (NEXI) vs. iShares MSCI Italy ETF (EWI)

Market Cap

€6.18B

Dividend Yield4.9%

Average Volume (3M)6.51M

Price to Earnings (P/E)39.1

Beta (1Y)1.08

Revenue Growth6.55%

EPS GrowthN/A

CountryIT

Employees8,609

SectorTechnology

Sector Strength91

IndustrySoftware - Infrastructure

Share Statistics

EPS (TTM)N/A

Shares Outstanding1,230,192,300

10 Day Avg. Volume4,257,235

30 Day Avg. Volume6,509,644

Financial Highlights & Ratios

PEG Ratio0.11

Price to Book (P/B)0.58

Price to Sales (P/S)0.00

P/FCF Ratio13.82

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

€6.02

Price Target Upside18.04% Upside

Rating ConsensusHold

Number of Analyst Covering4

Nexi S.p.A. Business Overview & Revenue Model

Company DescriptionNexi S.p.A. provides electronic money and payment services to banks, financial and insurance institutions, merchants, businesses, and public administration in Italy. The company offers acquiring services; configuration, activation, and maintenance of POS terminals; fraud prevention; and dispute management services, as well as customer support services. It also provides a range of issuing services, such as issue, supply, and management of private and corporate payment cards; installation and management of ATM's; clearing services; and digital banking services for the management of current accounts and payments. In addition, the company offers software applications for invoice management and storage, prepaid card reloading, bill payments, and postal payments. Nexi S.p.A. has a strategic agreement with Intesa Sanpaolo S.p.A. to acquire the PBZ Card's merchant business in the Croatian market. The company was founded in 1939 and is based in Milan, Italy.

How the Company Makes MoneyNexi S.p.A. generates revenue through multiple streams primarily related to its payment processing solutions. The company earns transaction fees from merchants and financial institutions for processing payments through its POS terminals and e-commerce platforms. Additionally, Nexi charges service fees for value-added services like fraud prevention, data analytics, and customer support. The company also gains revenue by offering digital banking services, including account management and card issuing for banks. Significant partnerships with banks and financial institutions enhance its market reach and customer base, contributing to its overall earnings.

Nexi S.p.A. Earnings Call Summary

Earnings Call Date:May 07, 2025

(Q1-2025)

% Change Since: -0.39%|

Next Earnings Date:Jul 30, 2025

Earnings Call Sentiment Positive

Nexi demonstrated strong financial performance with revenue and EBITDA growth, strategic partnerships, and effective cost management. However, macroeconomic uncertainties and historical banking impacts present challenges. The company's investment-grade status and shareholder return plans are positive indicators.

Q1-2025 Updates

Positive Updates

Profitable Growth and Revenue Increase

Nexi reported a revenue increase of 3.7% in Q1 2025, with Merchant Solutions up 4.5% despite adverse conditions such as leap year effects and Easter phasing. EBITDA grew by 7.1% with a margin expansion of almost 150 basis points.

Strategic Partnerships and Expansion

Nexi signed a strategic partnership with Planet in the hospitality vertical, targeting large merchants in the Nordics, Italy, and DACH. Direct complementary sales channels in Italy now account for about 30% of total new sales.

Strong Cost Efficiency and Shareholder Returns

Cost grew only 0.8% due to effective cost control and operating leverage. Nexi plans to return €600 million to shareholders in 2025, a 20% increase from last year, including a €300 million dividend and a €300 million share buyback program.

Investment Grade and Financial Structuring

Nexi was upgraded to investment grade by Standard & Poor’s and Fitch. A €2.9 billion financing plan was completed, and an EMTN program was established to optimize the financial structure.

Negative Updates

Impact of Historical Bank Situations

Nexi anticipates gradual visible effects from past bank situations in Italy, impacting the Merchant Services segment, and external pricing pressures affecting Issuing Solutions in other regions.

Macroeconomic and Calendar Challenges

The company faced macroeconomic uncertainties and calendar challenges, such as leap year and Easter phasing, which impacted short-term visibility and volume trends.

Cost Pressures and HR Cost Phasing

While cost efficiency was strong, Nexi anticipates cost pressures due to unwinding of last year's HR rightsizing and inflation impacting non-HR costs.

Company Guidance

During Nexi's First Quarter 2025 results call, the company reported a revenue increase of 3.7% year-on-year, with Merchant Solutions rising by 4.5%. The company achieved a 0.8% growth in costs, reflecting strong cost efficiency controls, while EBITDA increased by 7.1%, leading to an EBITDA margin expansion of approximately 150 basis points. Nexi is set to return €600 million to shareholders in 2025, which is 20% more than the previous year, with a €300 million dividend payment and a €300 million share buyback program commencing. Additionally, the company has been upgraded to investment grade by Standard & Poor’s and Fitch, and completed a €2.9 billion financing plan, enhancing its capital structure. Nexi confirmed its guidance for 2025, projecting low to mid-single-digit revenue growth and an EBITDA margin improvement of at least 50 basis points.

Nexi S.p.A. Financial Statement Overview

Summary

Nexi S.p.A. demonstrates robust revenue growth and stable gross profit margins, indicating operational efficiency. However, profitability is hindered by net losses affecting net profit margins. The balance sheet is moderately strong with significant equity, but rising debt levels pose a risk. Cash flow challenges due to zero free cash flow in 2024 need addressing to ensure sustainable growth.

Income Statement

Positive

Nexi S.p.A. shows a consistent revenue growth trend with a significant increase in total revenue from 2023 to 2024. However, net profit margin is low due to substantial net income losses in 2023, though there is recovery in 2024. Gross profit margin remains stable, indicating efficient cost management, while EBIT and EBITDA margins show fluctuating profitability.

Balance Sheet

Positive

The company's balance sheet reflects moderate financial stability with a reasonable debt-to-equity ratio, although it has increased slightly from 2023 to 2024. Stockholders' equity remains strong, contributing to a healthy equity ratio. However, total debt levels have risen, posing a potential risk if not managed effectively.

Cash Flow

Negative

Cash flow statements indicate challenges, particularly with operating and free cash flow showing volatility. Free cash flow was positive in prior years but zero in 2024, which may affect future investments and debt servicing. The lack of operating cash flow in 2024 is concerning and requires attention to improve liquidity management.

Breakdown	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	6.29B	5.90B	5.44B	3.02B	1.66B
Gross Profit	3.79B	2.40B	2.36B	1.26B	784.28M
EBITDA	2.27B	1.37B	1.31B	615.77M	473.09M
Net Income	167.36M	-1.03B	140.02M	37.73M	127.93M
Balance Sheet
Total Assets	24.50B	26.35B	25.55B	25.21B	6.29B
Cash, Cash Equivalents and Short-Term Investments	74.67M	2.69B	2.00B	2.98B	544.73M
Total Debt	7.95B	7.21B	6.97B	7.47B	2.78B
Total Liabilities	13.54B	15.05B	13.30B	12.90B	4.73B
Stockholders Equity	10.93B	11.27B	12.23B	12.30B	1.55B
Cash Flow
Free Cash Flow	527.05M	772.98M	558.39M	-47.29M	169.40M
Operating Cash Flow	974.03M	902.42M	1.09B	234.37M	304.60M
Investing Cash Flow	-353.86M	-1.52B	-1.94B	-439.61M	-1.20B
Financing Cash Flow	-1.35B	88.81M	-240.24M	1.59B	941.17M

Nexi S.p.A. Technical Analysis

Technical Analysis Sentiment

Neutral

Last Price5.10

Price Trends

50DMA

5.14

Negative

100DMA

4.94

Positive

200DMA

5.05

Positive

Market Momentum

MACD

0.02

Negative

RSI

50.33

Neutral

STOCH

26.29

Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For IT:NEXI, the sentiment is Neutral. The current price of 5.1 is above the 20-day moving average (MA) of 5.05, below the 50-day MA of 5.14, and above the 200-day MA of 5.05, indicating a neutral trend. The MACD of 0.02 indicates Negative momentum. The RSI at 50.33 is Neutral, neither overbought nor oversold. The STOCH value of 26.29 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for IT:NEXI.

Nexi S.p.A. Peers Comparison

Overall Rating

UnderperformOutperform

Sector (63)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
NEXI	63 Neutral	€6.18B	39.08		4.90%	6.55%	―
Sector *	63 Neutral	$33.80B	5.84	-11.67%	1.84%	5.28%	-18.34%
0RV0	―	€5.25B	24.95	17.49%	0.82%	―	―
7GV	―	€328.45M	―	-8.20%	―	―	―
7T4	―	€557.58M	30.73	4.41%	2.11%	―	―
9PC	―	€400.93M	40.30	25.87%	1.98%	―	―
TPRO	68 Neutral	€4.90B	75.40		―	32.71%	-37.38%

* Technology Sector Average

Performance Comparison

IT:NEXI

Nexi S.p.A.

5.12

-0.48

-8.57%

GB:0RV0

Reply SPA

141.00

4.95

3.64%

DE:7GV

SECO S.p.A.

2.40

-0.34

-12.41%

DE:7T4

Tinexta SpA

12.10

-4.40

-26.67%

DE:9PC

WIIT SpA

14.64

-6.47

-30.65%

IT:TPRO

Technoprobe S.p.A.

7.63

-1.19

-13.49%

Glossary

BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.Date of analysis: Jul 15, 2025