Saipem SpA (SPM) AI Stock Analysis

• Market Cap: €4.74B
• Dividend Yield: 7.07%
• Average Volume (3M): 39.35M
• Price to Earnings (P/E): 15.4
• Beta (1Y): 1.02
• Revenue Growth: 22.53%
• EPS Growth: 73.36%
• Country: IT
• Employees: 30,000
• Sector: Energy
• Sector Strength: 44
• Industry: Oil & Gas Equipment & Services
• EPS (TTM): 0.04
• Shares Outstanding: 1,995,631,800
• 10 Day Avg. Volume: 31,359,065
• 30 Day Avg. Volume: 39,353,648
• PEG Ratio: 2.28
• Price to Book (P/B): 1.71
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 5.23
• 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: €3.27
• Price Target Upside: 36.25% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 6

• Rating: 77 Outperform
• Price Target: €2.50 ▲(4.17%Upside)

Saipem SpA's strong financial performance, with solid revenue growth, improved margins, and efficient cash generation, is the most significant factor in its overall score. Technical indicators support a positive trend, though caution is advised due to signals of potential overbought conditions. The attractive valuation with a high dividend yield further boosts its appeal. Overall, the stock is positioned favorably within its industry.

Positive Factors

Financial Performance

Saipem’s fundamentals, including a strong balance sheet, backlog, and visibility on future margins, have never been stronger.

Market Position

The company is in an increasingly duopolistic market structure with promising commercial prospects.

Merger Synergies

Annual synergies of approximately €300m are expected to be achieved by the companies in the third year after completion of the merger.

Negative Factors

Project Challenges

Potential operating issues on the Courselle and Thai Oil projects could result in extra costs.

Project Execution

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

Stock Performance

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 its diversified portfolio of services primarily targeting the oil and gas sector. The company's main revenue streams include offshore and onshore engineering and construction projects, where it undertakes the design, procurement, and installation of facilities for energy companies. Saipem also earns income from its drilling services, offering both offshore and onshore drilling to extract oil and gas. Additionally, the company engages in operations and maintenance services, providing long-term support to energy installations. Strategic partnerships with major oil and gas companies and participation in large-scale international projects significantly contribute to Saipem's earnings, allowing it to maintain a strong presence in global markets.

Saipem SpA Financial Statement Overview

Summary

Saipem SpA is demonstrating a substantial recovery and strong financial performance across all verticals. The income statement shows improved margins and revenue growth, while the balance sheet maintains financial stability with low leverage. The cash flow statement reveals strong cash generation and efficiency, providing a solid foundation for future growth.

Income Statement

Saipem SpA has shown a strong improvement in its income statement. The TTM Gross Profit Margin is 23.52%, and the Net Profit Margin is 2.17%, both indicating a positive trend in profitability. The company reported a significant Revenue Growth Rate of 3.24% from 2024 to the TTM period, reflecting solid revenue expansion. Additionally, the EBIT Margin improved to 4.26% and the EBITDA Margin to 9.41%, highlighting effective cost management and operational efficiency.

Balance Sheet

The balance sheet of Saipem SpA is strong, with a Debt-to-Equity Ratio of 0.31, indicating a relatively low level of leverage. The company has a solid Equity Ratio of 51.02%, showcasing financial stability and a strong equity base. The Return on Equity for the TTM period is 12.03%, demonstrating efficient use of equity capital to generate profits. Overall, the balance sheet reflects good financial health with manageable debt levels.

Cash Flow

Saipem SpA's cash flow performance is impressive. The Free Cash Flow Growth Rate from 2024 to the TTM period is 22.52%, indicating robust cash generation capabilities. The Operating Cash Flow to Net Income Ratio is 3.79, and the Free Cash Flow to Net Income Ratio is 2.72, both highlighting strong cash conversion efficiency. This solid cash flow profile supports the company's operations and strategic initiatives effectively.

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
EBITDA	1.33B	951.00M	519.00M	-1.83B	-283.00M
Net Income	306.00M	179.00M	-315.00M	-2.47B	-1.12B
Balance Sheet
Total Assets	14.52B	12.87B	12.40B	11.54B	11.26B
Cash, Cash Equivalents and Short-Term Investments	2.54B	2.22B	2.13B	1.47B	1.58B
Total Debt	3.02B	3.09B	3.03B	3.94B	3.46B
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: 2.40
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

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 2.4 is above the 20-day moving average (MA) of 2.35, above the 50-day MA of 2.28, and above the 200-day MA of 2.12, indicating a bullish trend. The MACD of 0.03 indicates Positive momentum. The RSI at 58.96 is Neutral, neither overbought nor oversold. The STOCH value of 60.48 is Neutral, 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	77 Outperform	€4.74B	15.44	12.44%	7.07%	22.53%	73.36%
Sector *	67 Neutral	$15.20B	9.67	6.33%	5.24%	4.05%	-66.98%
0P3O	―	€1.18B	11.97	27.86%	5.90%	―	―
0N9S	―	€43.11B	16.99	4.83%	7.05%	―	―
0NQP	―	€16.99B	13.50	16.18%	6.88%	―	―
0HXB	―	€16.93B	10.34	10.53%	6.03%	―	―
T9O	―	€209.59M	16.39	5.46%	3.12%	―	―