Tesmec S.p.A. (TES) AI Stock Analysis

• Market Cap: €39.72M
• Dividend Yield: N/A
• Average Volume (3M): 2.89M
• Price to Earnings (P/E): ―
• Beta (1Y): 0.35
• Revenue Growth: -4.80%
• EPS Growth: -237.04%
• Country: IT
• Employees: 967
• Sector: Industrials
• Sector Strength: 93
• Industry: Industrial - Machinery
• EPS (TTM): >-0.01
• Shares Outstanding: 606,460,200
• 10 Day Avg. Volume: 5,096,208
• 30 Day Avg. Volume: 2,885,738
• PEG Ratio: 1.28
• Price to Book (P/B): 0.57
• Price to Sales (P/S): 0.00
• P/FCF Ratio: -8.15
• 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: €0.08
• Price Target Upside: 33.33% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 1

• Rating: 59 Neutral
• Price Target: €0.00 ▼(-100.00%Downside)

Tesmec S.p.A. demonstrates operational efficiency but faces significant financial challenges, including declining revenues, persistent net losses, and high leverage. Despite strong technical momentum, overbought conditions and valuation concerns due to a negative P/E ratio limit the stock's overall appeal.

Positive Factors

Financial Performance

1Q25 results came in slightly above expectations, denoting a solid start to the year despite macro uncertainties.

Strategic Partnerships

Management announced a partnership with Alstom for the supply of catenary and diagnostic services which should support results in the years to come.

Negative Factors

Financial Structure

Despite a challenging macroeconomic environment and a weak financial structure, the company is executing in line with expectations.

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

Company Description

Tesmec S.p.A. (TES) is an Italian company specializing in the design, production, and commercialization of high-tech equipment for the construction, maintenance, and efficiency of infrastructures related to the transport and distribution of energy, data, and materials. The company operates through three main business segments: Stringing Equipment, Trencher, and Rail. It serves various sectors, including energy, telecommunications, and railways, offering solutions that enhance network efficiency and sustainability.

How the Company Makes Money

Tesmec S.p.A. generates revenue primarily through the sale and leasing of its specialized equipment and machinery across its three main segments. The Stringing Equipment segment provides equipment for the construction and maintenance of power lines and fiber optic networks. The Trencher segment focuses on machinery used for excavation and the installation of pipelines and cables. The Rail segment offers solutions for the maintenance and inspection of railway networks. Tesmec also derives income from providing related services, such as equipment maintenance and technical support. Strategic partnerships and long-term contracts with major infrastructure companies and government entities significantly contribute to its revenue streams.

Tesmec S.p.A. Financial Statement Overview

Summary

Tesmec S.p.A. faces challenges with declining revenues and persistent net losses impacting financial performance. Operational efficiency is evident with stable EBIT and EBITDA margins, but high leverage and weak cash flow generation are significant risks.

Income Statement

The company exhibits a mixed performance in terms of profitability and growth. Gross profit margin on a TTM basis remains strong at approximately 60.4%, but the net profit margin is negative due to consistent net losses, with TTM net income at -€5.5M. Revenue shows a declining trend with a 7.7% decrease in TTM compared to the previous period, indicating challenges in maintaining sales growth. However, EBIT and EBITDA margins are relatively stable at 10% and 18.8% respectively, suggesting operational efficiency despite top-line pressures.

Balance Sheet

The balance sheet indicates a concerning level of leverage with a high debt-to-equity ratio of approximately 2.99. The equity ratio is relatively low at 16.7%, reflecting significant reliance on debt financing. Despite these risks, the company maintains a reasonable level of liquidity with cash and short-term investments of €57.6M. Return on equity is negative due to net losses, highlighting profitability challenges.

Cash Flow

Cash flow statements show a decline in free cash flow, with a negative TTM free cash flow of -€4.87M. Despite this, the operating cash flow to net income ratio is positive at approximately -3.45, indicating better cash earnings than accounting profits. However, negative free cash flow to net income ratio signals issues in cash generation relative to reported losses.

Breakdown	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	235.64M	251.92M	217.30M	180.49M	173.94M
Gross Profit	129.52M	41.10M	94.02M	77.98M	63.08M
EBITDA	40.28M	26.03M	36.78M	22.64M	9.55M
Net Income	-5.18M	-2.97M	7.86M	1.20M	-6.81M
Balance Sheet
Total Assets	423.95M	440.11M	407.69M	358.13M	362.95M
Cash, Cash Equivalents and Short-Term Investments	29.64M	53.75M	51.06M	50.29M	70.53M
Total Debt	212.03M	235.06M	196.51M	187.88M	188.40M
Total Liabilities	346.34M	361.86M	324.32M	285.49M	293.50M
Stockholders Equity	74.53M	75.70M	80.85M	72.57M	69.39M
Cash Flow
Free Cash Flow	-16.80M	-30.46M	-8.20M	-26.18M	-1.64M
Operating Cash Flow	16.09M	9.50M	24.95M	9.08M	20.58M
Investing Cash Flow	-26.04M	-44.31M	-35.35M	-28.70M	-32.42M
Financing Cash Flow	-3.63M	37.98M	10.64M	-1.08M	64.73M

Tesmec S.p.A. Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 0.06
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Negative
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For IT:TES, the sentiment is Positive. The current price of 0.06 is below the 20-day moving average (MA) of 0.06, above the 50-day MA of 0.06, and below the 200-day MA of 0.06, indicating a bullish trend. The MACD of <0.01 indicates Negative momentum. The RSI at 73.09 is Negative, neither overbought nor oversold. The STOCH value of 61.11 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for IT:TES.

Tesmec S.p.A. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
Sector *	67 Neutral	€2.78B	23.14	7.73%	2.84%	-1.25%	-31.40%
SAB	67 Neutral	€159.35M	27.47	3.89%	4.04%	16.53%	-20.56%
TES	59 Neutral	€39.72M	―	1.52%	―	-4.80%	-237.04%
FDA	38 Underperform	€2.48M	―	-301.74%	―	-38.87%	-89.45%