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TXT e solutions SPA (IT:TXT)
:TXT

TXT e solutions SPA (TXT) AI Stock Analysis

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IT

TXT e solutions SPA

(LSE:TXT)

Rating:73Outperform
Price Target:
€39.00
▲(13.87%Upside)
TXT e solutions SPA shows strong financial performance, driven by significant revenue growth and robust cash generation. However, the valuation indicates a slightly overvalued stock with a low dividend yield. Technical analysis presents mixed signals with moderate momentum and potential for undervaluation.
Positive Factors
Index Inclusion
Inclusion in the FTSE Italia Mid Cap index is expected to provide a positive catalyst for the stock, potentially boosting its profile among investors.
M&A Strategy
The recent acquisition of IT Values is contributing to improved financial flexibility to continue the M&A strategy.
Revenue Growth
Preliminary FY24 revenues showed strong growth, up 35% YoY, particularly driven by the Digital Advisory segment, which continued double-digit growth despite challenging comparisons.
Negative Factors
EBITDA Margin
EBITDA for 4Q24 was below expectations, which was attributed to investments supporting growth and a change in revenue mix, leading to slightly lower percentage margins.
Investment Impact
Management noted that the decrease in EBITDA margin was driven by increased investments in FY24 and a series of lower-margin contracts in the Software Engineering segment.

TXT e solutions SPA (TXT) vs. iShares MSCI Italy ETF (EWI)

TXT e solutions SPA Business Overview & Revenue Model

Company DescriptionTXT e-solutions S.p.A. is an international company specializing in software and services for digital transformation. The company operates in several sectors, including aerospace, automotive, and financial services, offering a range of solutions for engineering and software development. Its core products and services include advanced software applications, IT consulting, and system integration services designed to enhance operational efficiency and innovation for its clients.
How the Company Makes MoneyTXT e-solutions S.p.A. generates revenue through a diversified model that includes the sale of software licenses, consulting services, and support and maintenance contracts. The company earns money by providing tailored software solutions and services to clients in industries such as aerospace, automotive, and financial services. Key revenue streams include long-term contracts for software development and IT consulting, as well as recurring income from software maintenance and support services. Additionally, TXT may engage in strategic partnerships and collaborations that expand its market reach and enhance its service offerings, further contributing to its earnings.

TXT e solutions SPA Financial Statement Overview

Summary
TXT e solutions SPA exhibits strong financial health with impressive revenue growth of 35.7% and solid profitability. The balance sheet reflects a stable structure with manageable leverage and a strong equity base. Cash flow generation is robust, indicating efficient operations.
Income Statement
85
Very Positive
The company has demonstrated strong revenue growth with a 35.7% increase from 2023 to 2024. Gross profit margin stands at 25.0%, indicating effective cost management. Net profit margin improved to 5.2%, showing enhanced profitability. The EBIT and EBITDA margins are solid at 8.4% and 12.6%, respectively, reflecting efficient operations and strong earnings before interest, taxes, depreciation, and amortization.
Balance Sheet
78
Positive
The debt-to-equity ratio is 1.22, indicating moderate leverage. The equity ratio is 33.4%, suggesting a stable asset base supported by equity. Return on equity is 10.6%, reflecting decent profitability relative to shareholder equity. The balance sheet shows a solid financial position with a reasonable level of debt and equity support.
Cash Flow
82
Very Positive
The free cash flow has increased significantly, with a growth rate of 107.4% from 2023 to 2024. The operating cash flow to net income ratio is 1.68, indicating strong cash generation relative to net income. Free cash flow to net income ratio is 1.05, suggesting efficient conversion of net income to free cash flow. Overall, the cash flow statement reveals robust cash generation capabilities.
Breakdown
Dec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income StatementTotal Revenue
304.54M224.39M150.76M96.36M68.75M
Gross Profit
76.28M35.20M109.32M75.60M55.19M
EBIT
25.53M20.19M13.91M9.60M3.15M
EBITDA
38.27M35.80M24.60M15.31M9.74M
Net Income Common Stockholders
15.90M15.51M11.99M7.87M4.47M
Balance SheetCash, Cash Equivalents and Short-Term Investments
75.53M61.99M81.50M84.37M80.09M
Total Assets
448.38M302.24M300.78M226.06M173.45M
Total Debt
183.03M108.80M114.53M87.95M52.42M
Net Debt
124.78M70.87M81.51M51.87M40.49M
Total Liabilities
296.55M188.37M191.40M132.99M87.58M
Stockholders Equity
149.76M113.85M109.37M92.65M85.45M
Cash FlowFree Cash Flow
16.66M8.03M16.37M7.07M-2.31M
Operating Cash Flow
26.76M22.19M18.16M8.53M-1.16M
Investing Cash Flow
-49.02M11.09M-32.48M-10.27M7.14M
Financing Cash Flow
42.64M-28.77M11.01M25.88M-5.46M

TXT e solutions SPA Technical Analysis

Technical Analysis Sentiment
Neutral
Last Price34.25
Price Trends
50DMA
33.21
Positive
100DMA
35.28
Negative
200DMA
32.65
Positive
Market Momentum
MACD
0.43
Positive
RSI
45.41
Neutral
STOCH
4.70
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For IT:TXT, the sentiment is Neutral. The current price of 34.25 is below the 20-day moving average (MA) of 35.78, above the 50-day MA of 33.21, and above the 200-day MA of 32.65, indicating a neutral trend. The MACD of 0.43 indicates Positive momentum. The RSI at 45.41 is Neutral, neither overbought nor oversold. The STOCH value of 4.70 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for IT:TXT.

TXT e solutions SPA Peers Comparison

Overall Rating
UnderperformOutperform
Sector (62)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
ITDGV
74
Outperform
€271.85M7.68
3.56%-3.76%-9.21%
ITTXT
73
Outperform
€402.88M24.4112.73%0.73%37.78%-1.18%
73
Outperform
€499.22M27.784.41%4.26%15.67%-18.75%
72
Outperform
€435.26M45.8025.87%1.92%24.38%2.92%
62
Neutral
$11.81B10.34-7.44%2.91%7.41%-7.93%
ITIOT
56
Neutral
€317.81M-8.20%-9.38%-345.16%
* Technology Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
IT:TXT
TXT e solutions SPA
34.25
11.11
48.04%
IT:IOT
SECO S.p.A.
2.39
-0.76
-24.13%
IT:TNXT
Tinexta SpA
10.83
-6.00
-35.65%
IT:WIIT
WIIT SpA
16.48
-1.33
-7.47%
IT:DGV
Digital Value SpA
26.70
-36.29
-57.61%
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.