TXT e solutions SPA (TXT) AI Stock Analysis

• Market Cap: €402.88M
• Dividend Yield: 0.73%
• Average Volume (3M): 25.38K
• Price to Earnings (P/E): 24.4
• Beta (1Y): 0.64
• Revenue Growth: 37.78%
• EPS Growth: -1.18%
• Country: IT
• Employees: 3,282
• Sector: Technology
• Sector Strength: 83
• Industry: Software - Application
• EPS (TTM): 0.44
• Shares Outstanding: 13,006,250
• 10 Day Avg. Volume: 31,400
• 30 Day Avg. Volume: 25,378
• PEG Ratio: -1.65
• Price to Book (P/B): 2.93
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 27.32
• 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: €47.40
• Price Target Upside: 38.39% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 1

• Rating: 73 Outperform
• 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 Business Overview & Revenue Model

Company Description

TXT 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 Money

TXT 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

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

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

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 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
304.54M	224.39M	150.76M	96.36M	68.75M
	Gross Profit
76.28M	35.20M	109.32M	75.60M	55.19M
	EBIT
25.53M	20.19M	13.91M	9.60M	3.15M
	EBITDA
38.27M	35.80M	24.60M	15.31M	9.74M
	Net Income Common Stockholders
15.90M	15.51M	11.99M	7.87M	4.47M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
75.53M	61.99M	81.50M	84.37M	80.09M
	Total Assets
448.38M	302.24M	300.78M	226.06M	173.45M
	Total Debt
183.03M	108.80M	114.53M	87.95M	52.42M
	Net Debt
124.78M	70.87M	81.51M	51.87M	40.49M
	Total Liabilities
296.55M	188.37M	191.40M	132.99M	87.58M
	Stockholders Equity
149.76M	113.85M	109.37M	92.65M	85.45M
Cash Flow		Free Cash Flow
16.66M	8.03M	16.37M	7.07M	-2.31M
	Operating Cash Flow
26.76M	22.19M	18.16M	8.53M	-1.16M
	Investing Cash Flow
-49.02M	11.09M	-32.48M	-10.27M	7.14M
	Financing Cash Flow
42.64M	-28.77M	11.01M	25.88M	-5.46M

TXT e solutions SPA Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 34.25
• 50DMA: Positive
• 100DMA: Negative
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: 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

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
DGV	74 Outperform	€271.85M	7.68		3.56%	-3.76%	-9.21%
TXT	73 Outperform	€402.88M	24.41	12.73%	0.73%	37.78%	-1.18%
TNXT	73 Outperform	€499.22M	27.78	4.41%	4.26%	15.67%	-18.75%
WIIT	72 Outperform	€435.26M	45.80	25.87%	1.92%	24.38%	2.92%
Sector *	62 Neutral	$11.81B	10.34	-7.44%	2.91%	7.41%	-7.93%
IOT	56 Neutral	€317.81M	―	-8.20%	―	-9.38%	-345.16%