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

• Market Cap: €31.95M
• Dividend Yield: N/A
• Average Volume (3M): 1.15M
• 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: 87
• Industry: Industrial - Machinery
• EPS (TTM): >-0.01
• Shares Outstanding: 606,460,200
• 10 Day Avg. Volume: 944,994
• 30 Day Avg. Volume: 1,149,231
• PEG Ratio: -0.20
• Price to Book (P/B): 0.41
• Price to Sales (P/S): 0.00
• P/FCF Ratio: -1.90
• 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: 60.00% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 1

• Rating: 58 Neutral
• Price Target: ―

Tesmec S.p.A.'s overall stock score is influenced by its operational improvements and positive cash-generating ability, though its high leverage and ongoing profitability challenges weigh heavily. Technical analysis suggests a neutral to slightly bearish trend. Valuation metrics, particularly the negative P/E ratio and absence of dividends, further detract from the stock's appeal.

Positive Factors

Debt Reduction

The transaction with OT Engineering has a material positive impact on Tesmec, leading to a reduction of Eu9.5mn in net debt.

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

Macroeconomic Challenges

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. designs, produces, and markets products and solutions for the construction, maintenance, and streamlining of infrastructures relating to the transmission of electrical power, data, and material transport in Italy, rest of Europe, the Middle East, Africa, North and Central America, and BRIC and other countries. It operates through Energy, Trencher, and Rail segments. The company offers stringing solutions, such as digital stringing machines, continuous linear puller, full electric machines, tower erection, OPGW installation and safety on crossing, essential machines, reels, ropes, and joints, drum elevators, and reel winders, stringing blocks, pivoting array blocks and head boards, bicycles and trolleys, aluminum structures, overhead tools and accessories, and underground machines, drum elevators and trailers, accessories. It also provides energy automation products comprising protection and control systems; remote control devices; service telecommunications, such as teleprotection and powerline carrier for high voltage grids, and line traps and line matching units for PLC; and smart metering tools. In addition, the company offers rocksaw, chainsaw, and bucket wheel trenchers; surface miners; detection and mapping solutions; mechanical laying solutions; and trenchers with integrated vacuum systems. Further, it provides catenary installation solutions, catenary and track maintenance vehicles, diagnostic solutions and systems, snow removal solutions, and wiring units for railway. Tesmec S.p.A. was founded in 1951 and is headquartered in Grassobbio, Italy.

How the Company Makes Money

Tesmec S.p.A. generates revenue primarily through the sale and leasing of its specialized equipment and systems across its three business sectors. The stringing equipment segment provides substantial income through the manufacturing and sale of machinery used in the installation of power lines and fiber optic cables. In the railway electrification sector, the company earns by supplying equipment and services for the construction and maintenance of railway infrastructures. The surface mining segment contributes to revenue through the sale and rental of trenchers and surface miners used in mining and quarrying operations. Additionally, Tesmec offers after-sales services, including maintenance, spare parts, and support, which provide a recurring revenue stream. Strategic partnerships and collaborations with major energy and telecom companies, as well as their global presence, further bolster their market reach and revenue potential.

Tesmec S.p.A. Financial Statement Overview

Summary

Tesmec S.p.A. shows operational improvements through better EBIT and EBITDA margins but struggles with consistent profitability due to net losses and high leverage. The company faces challenges in generating positive free cash flow, impacting its ability to invest and reduce debt. Stability is hindered by its financial structure, yet operational cash flows remain a positive aspect.

Income Statement

Tesmec S.p.A. shows a mixed performance in terms of revenue and margins. The revenue has fluctuated over the years, with a recent decline from 2023 to 2024 by 6.5%. However, the company has improved its EBIT and EBITDA margins, indicating better operational efficiency. The negative net profit margin, driven by net losses in recent years, is a concern for profitability.

Balance Sheet

The balance sheet reflects a high debt-to-equity ratio, which indicates significant leverage and potential financial risk. The equity ratio is low, suggesting limited equity financing. However, the return on equity (ROE) has been negative in recent years due to net losses, which undermines shareholder value.

Cash Flow

Cash flow analysis reveals improvement in operating cash flow over time, yet free cash flow remains negative, highlighting challenges in covering capital expenditures. The operating cash flow to net income ratio is strong, indicating good cash-generating ability relative to net income, despite consistent net 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: Negative
• Last Price: 0.05
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For IT:TES, the sentiment is Negative. The current price of 0.05 is below the 20-day moving average (MA) of 0.05, below the 50-day MA of 0.06, and below the 200-day MA of 0.07, indicating a bearish trend. The MACD of >-0.01 indicates Positive momentum. The RSI at 37.92 is Neutral, neither overbought nor oversold. The STOCH value of 50.00 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative 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 *	71 Outperform	¥255.65B	12.95	8.49%	3.09%	6.31%	12.94%
TES	58 Neutral	€31.95M	―	1.52%	―	-4.80%	-237.04%
0EFO		€2.98M	―	-301.74%	―	―	―
0NIG		€162.15M	28.05	3.89%	3.48%	―	―
ESAU		€40.55M	44.59		1.65%	―	―
MARP		€18.70M	56.75		7.09%	―	―
SIT		€33.22M	―		―	―	―