TXT e solutions SPA (TXT) AI Stock Analysis

• Market Cap: €414.64M
• Dividend Yield: 0.71%
• Average Volume (3M): 18.61K
• Price to Earnings (P/E): 25.1
• Beta (1Y): 0.66
• Revenue Growth: 37.78%
• EPS Growth: -1.18%
• Country: IT
• Employees: 3,282
• Sector: Technology
• Sector Strength: 89
• Industry: Software - Application
• EPS (TTM): 0.44
• Shares Outstanding: 13,006,250
• 10 Day Avg. Volume: 15,752
• 30 Day Avg. Volume: 18,613
• PEG Ratio: 6.94
• Price to Book (P/B): 2.91
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 25.05
• 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: €41.70
• Price Target Upside: 16.81% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 2

• Rating: 75 Outperform
• Price Target: €40.00 ▲(12.04%Upside)

TXT e solutions SPA exhibits strong financial performance backed by robust revenue growth and efficient capital management. Technical indicators show a positive trend, although valuation metrics suggest the stock is fairly priced. The absence of earnings call data and corporate events limits further insights. Overall, the company's operational strength and stable financials support a favorable outlook.

Positive Factors

Earnings

1Q25 results beat forecasts with revenues 2.5% higher than expected and a significant year-over-year growth.

M&A Strategy

The recent acquisition of IT Values is contributing to improved financial flexibility to continue the M&A strategy.

Market Position

Inclusion in the FTSE Italia Mid Cap index is expected to provide a positive catalyst for the stock, potentially boosting its profile among investors.

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

EBITDA margin narrowed by c.110bps to 13% driven by increased investments and a series of low-margin contracts in the Software Engineering segment.

TXT e solutions SPA Business Overview & Revenue Model

Company Description

TXT e-solutions S.p.A., together with its subsidiaries, provides software and service solutions in Italy and internationally. It operates in two segments: Aerospace, Aviation & Transportation; and Fintech. The Aerospace, Aviation & Transportation segment offers on-board software, flight simulators, training systems, flight support systems, and manufacturing solutions; and specialized engineering services to aerospace companies and airline operators. Its customers comprise manufacturers of aircraft and engines, airlines, and civil and defense operators, as well as maintenance, repair, and overhaul companies. The Fintech segment provides solutions for the nonperforming loans, digital payments, factoring, compliance, and supply chain finance market; financial applications for banks and financial companies; solutions for risk management; technological and consulting services; and information and communications technology services to the bank sector. The company was formerly known as TXT Ingegneria Informatica S.p.A. and changed its name to TXT e-solutions S.p.A. in March 2000. TXT e-solutions S.p.A. was founded in 1989 and is headquartered in Cologno Monzese, Italy.

How the Company Makes Money

TXT e-solutions SPA generates revenue through multiple streams, primarily by delivering specialized software solutions and consulting services tailored to the needs of its clients in the aerospace, automotive, and industrial sectors. The company earns money by developing bespoke software applications, offering IT consultancy, and providing systems integration services that help clients improve their business processes and technology infrastructure. Additionally, TXT engages in long-term contracts with businesses, ensuring recurring revenue through software maintenance and support services. Strategic partnerships and collaborations with leading technology providers also contribute to its revenue by expanding its market reach and enhancing its service offerings.

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 as demonstrated by a net profit margin of 5.2%. The company maintains a stable balance sheet and robust cash flow generation, indicating efficient operations and effective cash management.

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	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	329.57M	304.54M	224.39M	150.76M	96.36M	68.75M
Gross Profit	81.86M	76.28M	35.20M	109.32M	75.60M	55.19M
EBITDA	43.16M	38.27M	35.80M	24.60M	15.31M	9.74M
Net Income	16.83M	15.90M	15.51M	11.99M	7.87M	4.47M
Balance Sheet
Total Assets	465.40M	448.38M	302.24M	300.78M	226.06M	173.45M
Cash, Cash Equivalents and Short-Term Investments	86.67M	75.53M	61.99M	81.50M	84.37M	80.09M
Total Debt	193.86M	183.03M	108.80M	114.53M	87.95M	52.42M
Total Liabilities	309.45M	296.55M	188.37M	191.40M	132.99M	87.58M
Stockholders Equity	153.40M	149.76M	113.85M	109.37M	92.65M	85.45M
Cash Flow
Free Cash Flow	17.81M	16.66M	8.03M	16.37M	7.07M	-2.31M
Operating Cash Flow	27.20M	26.76M	22.19M	18.16M	8.53M	-1.16M
Investing Cash Flow	-34.74M	-49.02M	11.09M	-32.48M	-10.27M	7.14M
Financing Cash Flow	49.86M	42.64M	-28.77M	11.01M	25.88M	-5.46M

TXT e solutions SPA Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 35.70
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For IT:TXT, the sentiment is Positive. The current price of 35.7 is above the 20-day moving average (MA) of 34.23, above the 50-day MA of 34.74, and above the 200-day MA of 33.61, indicating a bullish trend. The MACD of 0.19 indicates Negative momentum. The RSI at 60.71 is Neutral, neither overbought nor oversold. The STOCH value of 84.01 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive 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
TXT	75 Outperform	€414.64M	25.12	12.73%	0.71%	37.78%	-1.18%
Sector *	63 Neutral	$33.87B	5.80	-11.87%	1.82%	5.31%	-18.50%
7GV		€316.48M	―	-8.20%	―	―	―
7T4		€561.26M	30.70	4.41%	2.12%	―	―
101		€95.64M	10.89	11.71%	―	―	―
9PC		€410.43M	40.69	25.87%	1.65%	―	―
DGV	83 Outperform	€305.45M	8.63		2.67%	-3.76%	-9.21%