TXT e solutions SPA (TXT) AI Stock Analysis

• Market Cap: €310.54M
• Dividend Yield: 0.8%
• Average Volume (3M): 32.66K
• Price to Earnings (P/E): 18.2
• Beta (1Y): 0.63
• Revenue Growth: 28.77%
• EPS Growth: -3.40%
• Country: IT
• Employees: 3,282
• Sector: Technology
• Sector Strength: 88
• Industry: Software - Application
• EPS (TTM): N/A
• Shares Outstanding: 13,006,250
• 10 Day Avg. Volume: 40,963
• 30 Day Avg. Volume: 32,662
• PEG Ratio: -4.19
• Price to Book (P/B): 3.01
• Price to Sales (P/S): 1.48
• P/FCF Ratio: 27.05
• 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: €40.00
• Price Target Upside: 51.52% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 1
• EPS Forecast (FY): 2.62
• Revenue Forecast (FY): €427.90M

• Rating: 61 Neutral
• Price Target: €27.00 ▲(2.27% Upside)
• Action: Reiterated Date: 02/04/26
• Date: Action: Reiterated 02/04/26

The score is supported by solid fundamentals (steady growth, stable margins, and strong free cash flow growth), but is meaningfully held back by very bearish technical signals (price below all major DMAs with oversold momentum) and some balance-sheet risk from moderate leverage. Valuation is broadly neutral with a moderate P/E and a low dividend yield.

Positive Factors

Recurring revenue and strategic partnerships

TXT’s subscription-based licensing, maintenance and consulting model creates predictable, recurring revenue that supports renewal rates and longer customer lifecycles. Strategic partnerships expand distribution and project scale, aiding cross-selling and steady revenue visibility over the medium term.

Strong free cash flow growth

A 34.67% TTM increase in free cash flow indicates meaningful cash generation capacity, enabling reinvestment in product development, selective M&A or debt reduction. Durable cash generation strengthens financial flexibility and funds strategic initiatives without heavy reliance on external capital.

Stable margins and solid ROE

Maintained gross and net margins alongside a 12.18% ROE reflect operational efficiency and decent return on shareholders’ capital. These metrics support sustainable profitability and indicate the business can convert revenue into shareholder value, underpinning longer-term earnings durability.

Negative Factors

Moderate leverage and low equity ratio

A debt-to-equity of 1.28 and a low equity ratio raise refinancing and interest-rate sensitivity risk. Elevated leverage reduces strategic flexibility, heightens vulnerability to revenue shocks, and can constrain investment or R&D spending if cash generation weakens or borrowing costs rise.

Declining gross margin

A falling gross margin signals rising input costs or pricing pressure in key verticals. Persistent margin erosion would compress operating profitability and free cash flow, forcing trade-offs between margin restoration, pricing strategy, or increased investment to preserve competitive positioning.

Low operating cash conversion

An OCF-to-net-income ratio of 0.14 indicates weak conversion of accounting profits into cash, suggesting working-capital strain or accrual-driven earnings. Poor cash conversion undermines resilience, may necessitate external funding, and limits the firm’s ability to self-finance growth or reduce leverage.

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 generates revenue primarily through the sale of software licenses, maintenance services, and consulting services. The company offers its software solutions on a subscription basis, which provides a steady stream of recurring revenue. Key revenue streams include the licensing of proprietary software, implementation and customization services for clients, and ongoing support and maintenance contracts. Additionally, TXT has formed strategic partnerships with other technology firms and industry leaders, which enhances its market reach and contributes to revenue growth through collaborative projects and shared resources.

TXT e solutions SPA Financial Statement Overview

Summary

Overall financials are solid: consistent revenue growth (TTM +3.10%), stable profitability (TTM gross margin 24.61%, net margin 5.06%), and strong free cash flow growth (TTM +34.67%). Offsetting factors include a declining gross margin and moderate leverage (debt-to-equity 1.28) with a relatively low equity ratio, which increases balance-sheet risk.

Income Statement

TXT e solutions SPA has demonstrated consistent revenue growth, with a TTM revenue growth rate of 3.10%. The company maintains a healthy gross profit margin of 24.61% and a net profit margin of 5.06% in the TTM period. However, the gross profit margin has decreased from previous years, indicating potential cost pressures. The EBIT and EBITDA margins are stable, reflecting efficient operational management.

Balance Sheet

The company's debt-to-equity ratio stands at 1.28, indicating a moderate level of leverage. Return on equity is 12.18%, showing effective use of equity to generate profits. The equity ratio is relatively low, suggesting a higher reliance on debt financing, which could pose risks if not managed carefully.

Cash Flow

TXT e solutions SPA has shown strong free cash flow growth of 34.67% in the TTM period. The operating cash flow to net income ratio is 0.14, and the free cash flow to net income ratio is 0.56, indicating a solid cash flow position. However, the operating cash flow coverage ratio has slightly decreased, which warrants monitoring.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	366.48M	304.54M	224.39M	150.76M	96.36M	68.75M
Gross Profit	90.23M	76.28M	35.20M	109.32M	75.60M	55.19M
EBITDA	51.25M	38.27M	35.80M	24.06M	15.31M	9.74M
Net Income	18.37M	15.90M	15.51M	11.99M	7.87M	4.47M
Balance Sheet
Total Assets	517.08M	448.38M	302.24M	300.78M	226.06M	173.45M
Cash, Cash Equivalents and Short-Term Investments	94.84M	75.53M	61.99M	81.50M	84.37M	80.09M
Total Debt	244.11M	183.03M	112.80M	114.53M	87.95M	52.89M
Total Liabilities	352.79M	296.55M	188.37M	191.40M	132.99M	87.58M
Stockholders Equity	161.15M	149.76M	113.85M	109.37M	92.65M	85.45M
Cash Flow
Free Cash Flow	18.34M	16.66M	8.03M	16.37M	7.07M	-2.31M
Operating Cash Flow	29.11M	26.76M	22.19M	18.16M	8.53M	-1.16M
Investing Cash Flow	-35.68M	-49.02M	11.09M	-32.48M	-10.27M	7.14M
Financing Cash Flow	64.46M	42.64M	-28.77M	11.01M	25.88M	-5.46M

TXT e solutions SPA Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 26.40
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For IT:TXT, the sentiment is Negative. The current price of 26.4 is above the 20-day moving average (MA) of 25.19, below the 50-day MA of 28.17, and below the 200-day MA of 31.68, indicating a neutral trend. The MACD of -1.17 indicates Negative momentum. The RSI at 44.37 is Neutral, neither overbought nor oversold. The STOCH value of 61.65 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative 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	71 Outperform	€292.72M	15.53	―	2.82%	-24.28%	-57.55%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
TXT	61 Neutral	€310.54M	18.24	12.61%	0.80%	28.77%	-3.40%
TNXT	61 Neutral	€697.55M	-155.74	-1.19%	2.02%	14.90%	-123.79%
IOT	58 Neutral	€367.68M	-40.31	-3.24%	―	1.84%	-15.49%
WIIT	57 Neutral	€703.87M	77.34	25.60%	1.54%	13.74%	-23.30%