SNAM S.p.A. (SRG) AI Stock Analysis

• Market Cap: €18.73B
• Dividend Yield: 5.2%
• Average Volume (3M): 5.59M
• Price to Earnings (P/E): 13.4
• Beta (1Y): 0.24
• Revenue Growth: -8.04%
• EPS Growth: 30.49%
• Country: IT
• Employees: 3,971
• Sector: Utilities
• Sector Strength: 65
• Industry: Regulated Gas
• EPS (TTM): 0.10
• Shares Outstanding: 3,360,858,000
• 10 Day Avg. Volume: 5,863,752
• 30 Day Avg. Volume: 5,593,757
• PEG Ratio: 0.97
• Price to Book (P/B): 1.61
• Price to Sales (P/S): 4.05
• P/FCF Ratio: -14.34
• 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: €5.66
• Price Target Upside: 1.43% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 7
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 72 Outperform
• Price Target: €6.50 ▲(16.49% Upside)

The overall stock score is driven primarily by strong financial performance and attractive valuation. Despite challenges with declining revenues and negative free cash flow, the company's profitability and operational efficiency are strong. Technical analysis suggests bullish momentum, though caution is advised due to overbought signals.

Positive Factors

Operational Efficiency

SNAM's high profit margins indicate strong operational efficiency, which is crucial for maintaining profitability and competitive advantage in the regulated gas industry.

Profitability Relative to Equity

A strong return on equity suggests effective management and the ability to generate profits from shareholders' investments, supporting long-term financial health.

Stable Income Streams

SNAM's reliance on regulatory frameworks and long-term contracts ensures predictable revenue, enhancing financial stability and reducing risk from market volatility.

Negative Factors

Revenue Decline

A significant decline in revenue can impact SNAM's ability to invest in growth opportunities and maintain its market position, posing a challenge to future profitability.

Negative Free Cash Flow

Persistent negative free cash flow indicates ongoing cash management challenges, potentially limiting SNAM's ability to fund operations and growth without external financing.

High Leverage

High leverage can increase financial risk, especially in volatile markets, and may constrain SNAM's financial flexibility and ability to respond to industry changes.

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

Company Description

SNAM S.p.A. (SRG) is a leading Italian company specializing in the natural gas infrastructure sector. Established in 1941, SNAM operates in the gas transmission, storage, and regasification markets, managing a vast network of pipelines and storage facilities across Italy and Europe. The company plays a critical role in ensuring the security and efficiency of gas supply, contributing significantly to the energy transition through its investments in sustainable technologies and infrastructures.

How the Company Makes Money

SNAM generates revenue primarily through the transportation, storage, and regasification of natural gas. Its revenue model is based on a regulated framework, with earnings derived from tariffs charged for the use of its pipelines and storage facilities. Key revenue streams include fees from gas transport services, which account for a significant portion of its income, as well as income from storage services and regasification terminals. Additionally, SNAM engages in strategic partnerships and collaborations with other energy companies and stakeholders, enhancing its operational capabilities and market reach. The company also benefits from regulatory incentives aimed at promoting investments in energy transition projects, further contributing to its earnings.

SNAM S.p.A. Financial Statement Overview

Summary

SNAM S.p.A. demonstrates strong profitability and operational efficiency, with robust EBIT and EBITDA margins. However, it faces challenges with declining revenues and negative free cash flow. The balance sheet reflects significant leverage, though profitability relative to equity remains strong.

Income Statement

The company has shown strong gross and net profit margins, with a gross profit margin of 87.8% and a net profit margin of 35.5% in 2024. However, the revenue has declined by 17.3% from 2023 to 2024, indicating potential challenges. EBIT and EBITDA margins remain robust at 47.2% and 87.4%, respectively, suggesting operational efficiency.

Balance Sheet

The debt-to-equity ratio is relatively high at 2.06, reflecting significant leverage, while the return on equity is strong at 14.1%, indicating good profitability relative to equity. The equity ratio is moderate at 24.9%, showing a balanced capital structure.

Cash Flow

The free cash flow has improved from -1.68 billion in 2023 to -1.00 billion in 2024, yet it remains negative, indicating cash flow challenges. The operating cash flow to net income ratio is 1.44, suggesting that operating cash flows cover the net income well, but the free cash flow to net income ratio is negative due to high capital expenditures.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	1.82B	3.55B	4.24B	3.50B	3.29B	2.75B
Gross Profit	1.91B	3.12B	2.22B	1.87B	1.78B	1.70B
EBITDA	2.34B	3.10B	2.33B	2.23B	2.26B	2.16B
Net Income	992.00M	1.26B	1.14B	671.00M	1.50B	1.10B
Balance Sheet
Total Assets	35.95B	35.79B	33.52B	32.47B	27.36B	26.13B
Cash, Cash Equivalents and Short-Term Investments	2.42B	1.81B	1.38B	1.76B	1.34B	3.04B
Total Debt	19.99B	18.36B	16.65B	13.68B	15.36B	15.94B
Total Liabilities	26.77B	26.82B	25.93B	24.95B	20.12B	19.66B
Stockholders Equity	9.14B	8.93B	7.63B	7.47B	7.20B	6.47B
Cash Flow
Free Cash Flow	-791.00M	-1.00B	-1.68B	2.79B	94.00M	431.00M
Operating Cash Flow	1.88B	1.81B	-135.00M	4.11B	1.34B	1.60B
Investing Cash Flow	-3.13B	-2.68B	-2.23B	-1.36B	-1.64B	-1.64B
Financing Cash Flow	1.14B	1.29B	1.99B	-2.32B	-1.41B	233.00M

SNAM S.p.A. Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 5.58
• 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:SRG, the sentiment is Positive. The current price of 5.58 is below the 20-day moving average (MA) of 5.65, above the 50-day MA of 5.50, and above the 200-day MA of 5.08, indicating a neutral trend. The MACD of <0.01 indicates Positive momentum. The RSI at 45.90 is Neutral, neither overbought nor oversold. The STOCH value of 23.48 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for IT:SRG.

SNAM S.p.A. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
TEN	78 Outperform	€18.13B	10.01	12.14%	4.42%	-11.36%	-20.23%
SRG	72 Outperform	€18.73B	13.41	17.62%	5.20%	-8.04%	30.49%
TRN	72 Outperform	€17.86B	16.15	19.67%	4.47%	10.18%	8.43%
ASC	70 Outperform	€694.56M	8.06	9.91%	4.61%	20.11%	75.92%
IG	67 Neutral	€9.43B	16.76	―	4.11%	-3.34%	8.88%
SPM	66 Neutral	€4.58B	13.89	13.05%	7.28%	18.52%	29.29%
Sector *	66 Neutral	$17.65B	18.10	5.60%	3.62%	6.62%	11.55%