Saipem SpA (SPM) AI Stock Analysis

• Market Cap: €4.53B
• Dividend Yield: 7.54%
• Average Volume (3M): 43.31M
• Price to Earnings (P/E): 14.8
• Beta (1Y): 1.00
• Revenue Growth: 22.53%
• EPS Growth: 73.36%
• Country: IT
• Employees: 30,000
• Sector: Energy
• Sector Strength: 43
• Industry: Oil & Gas Equipment & Services
• EPS (TTM): 0.04
• Shares Outstanding: 1,995,557,700
• 10 Day Avg. Volume: 47,284,817
• 30 Day Avg. Volume: 43,305,935
• PEG Ratio: N/A
• Price to Book (P/B): 1.69
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 5.87
• 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: €3.33
• Price Target Upside: 44.16% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 7

• Rating: 70 Outperform
• Price Target: €2.50 ▲(8.23%Upside)

Saipem SpA's overall score is driven primarily by its strong financial performance and attractive valuation, including a high dividend yield. However, technical indicators suggest caution as the stock is currently overbought, which may lead to short-term price corrections. The absence of notable earnings call insights or corporate events leaves the analysis focused on fundamental and technical aspects.

Positive Factors

Dividend Policy

Saipem's new dividend policy will deliver around 7% yield in 2025-26, which shareholders could potentially appreciate.

Financial Performance

A significant improvement in EBITDA of 44% is anticipated for the fourth quarter of 2024, indicating strong financial growth.

Merger and Acquisition

Saipem and Subsea7 announced that they have reached an agreement of a possible merger of the two companies, creating a global leader in energy services.

Negative Factors

Project Budget Concerns

The Thai Oil project has experienced budget increases, raising concerns about the project's execution and financial impact.

Project Execution Risks

Potential operating issues on the Courselle and Thai Oil projects could result in costs exceeding the company's provisions, posing financial risks.

Stock Price Decline

Despite strong fundamentals, there has been little investor response, and the share price has dropped approximately 35% from its peak.

Saipem SpA Business Overview & Revenue Model

Company Description

Saipem SpA provides energy and infrastructure solutions worldwide. The company operates through five divisions: Offshore Engineering & Construction (E&C), Onshore Engineering & Construction, Offshore Drilling, Onshore Drilling, and XSIGHT. It offers engineering, construction, installation of platforms, pipelines, subsea fields, maintenance, modification, operation, and decommissioning activities, as well as develops marine wind farms and energy integration projects. The company also designs onshore project in the LNG and regasification, refining, petrochemical, fertilizers, pipelines, gas, oil processing stations, floaters, renewables, biotechnologies, CO2 capture, transportation, storage, and hydrogen production and transportation. In addition, the company provides procurement, project management, construction, and engineering integrated services for the energy industry markets and public infrastructures, as well as offshore and onshore drilling services on all types of rigs and in all geographical areas. As of December 31, 2021, its offshore drilling fleet consisted of twelve vessels, including six ultra-deep-water units, five high specification jack-ups, and one standard jack-ups. The company also operates 9 fabrication yards and a sea fleet of 41 vessels; and onshore drilling fleet comprised 84 units. Saipem S.p.A. is headquartered in Milan, Italy.

How the Company Makes Money

Saipem SpA generates revenue through a diverse range of services primarily in the energy sector. Its key revenue streams include offshore and onshore engineering and construction services, drilling operations, and subsea services. The company undertakes large-scale projects such as the construction of offshore platforms, pipelines, and refineries. Revenue is also derived from long-term contracts with major oil and gas clients, which often involve extensive project management and technical expertise. Additionally, Saipem's strategic partnerships and joint ventures enable it to access new markets and leverage shared resources, further contributing to its earnings.

Saipem SpA Financial Statement Overview

Summary

Saipem SpA has shown a solid financial recovery with significant improvements in revenue growth, profit margins, and cash flow. The company has effectively reduced leverage and strengthened its equity position. Despite past challenges with profitability and high debt levels, the current financial statements reflect a positive trajectory in operational efficiency and financial health.

Income Statement

Saipem SpA has shown strong revenue growth with a 22.45% increase from 2023 to 2024. The gross profit margin improved to 23.26% in 2024 from 18.44% in 2023, indicating better cost management. Net profit margin also saw improvement, rising to 2.10% in 2024 from 1.51% in 2023. However, the company faced challenges in previous years with negative EBIT and EBITDA, which have now turned positive, reflecting a recovery trajectory.

Balance Sheet

The debt-to-equity ratio improved to 0.26 in 2024 from 1.29 in 2021, highlighting reduced leverage. The equity ratio increased to 51.47% in 2024, indicating a stronger equity position. However, the company had a history of high debt levels, which have been decreasing but still require close monitoring. Return on equity improved significantly, reaching 12.13% in 2024 from negative values in previous years.

Cash Flow

Saipem SpA demonstrated a robust 596.15% growth in free cash flow from 2023 to 2024, reflecting strong cash generation capabilities. The operating cash flow to net income ratio also improved, indicating efficient cash conversion. The company successfully turned around its free cash flow position, which was negative in earlier years, underscoring effective cash flow management.

Breakdown
Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
14.55B	11.88B	9.98B	6.88B	7.34B
	Gross Profit
3.38B	2.19B	1.71B	-485.00M	1.40B
	EBIT
606.00M	437.00M	73.00M	-2.27B	-217.00M
	EBITDA
1.33B	951.00M	519.00M	-1.83B	-283.00M
	Net Income Common Stockholders
306.00M	179.00M	-315.00M	-2.47B	-1.12B
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
1.79B	2.22B	2.13B	1.47B	1.58B
	Total Assets
14.52B	12.87B	12.40B	11.54B	11.26B
	Total Debt
3.02B	3.09B	3.03B	3.94B	3.46B
	Net Debt
1.61B	953.00M	981.00M	2.52B	1.94B
	Total Liabilities
11.99B	10.47B	10.31B	11.19B	8.31B
	Stockholders Equity
2.52B	2.39B	2.07B	326.00M	2.92B
Cash Flow		Free Cash Flow
724.00M	104.00M	-1.00B	-208.00M	-199.00M
	Operating Cash Flow
1.06B	586.00M	-477.00M	90.00M	123.00M
	Investing Cash Flow
-542.00M	-175.00M	5.00M	-490.00M	-463.00M
	Financing Cash Flow
-544.00M	-282.00M	871.00M	331.00M	-238.00M

Saipem SpA Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 2.31
• 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 IT:SPM, the sentiment is Positive. The current price of 2.31 is above the 20-day moving average (MA) of 2.12, above the 50-day MA of 1.94, and above the 200-day MA of 2.04, indicating a bullish trend. The MACD of 0.09 indicates Negative momentum. The RSI at 77.95 is Negative, neither overbought nor oversold. The STOCH value of 98.94 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for IT:SPM.

Saipem SpA Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
SPM	70 Outperform	€4.53B	14.84	12.44%	7.54%	22.53%	73.36%
Sector *	57 Neutral	$7.16B	3.10	-4.49%	5.66%	0.82%	-49.15%
0P3O		€999.34M	9.88	27.86%	3.32%	―	―
0N9S		€40.11B	15.83	4.83%	7.59%	―	―
0NQP		€17.60B	13.82	16.18%	5.43%	―	―
0HXB		€16.31B	9.95	10.53%	4.95%	―	―
T9O		€163.83M	12.85	5.46%	4.10%	―	―