TXT e solutions SPA (TXT) AI Stock Analysis

• Market Cap: €359.36M
• Dividend Yield: 0.82%
• Average Volume (3M): 21.25K
• Price to Earnings (P/E): 21.4
• Beta (1Y): 0.59
• Revenue Growth: 39.23%
• EPS Growth: 0.52%
• Country: IT
• Employees: 3,282
• Sector: Technology
• Sector Strength: 86
• Industry: Software - Application
• EPS (TTM): 0.39
• Shares Outstanding: 13,006,250
• 10 Day Avg. Volume: 18,776
• 30 Day Avg. Volume: 21,245
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• 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: 55.67% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 1

• Rating: 66 Neutral
• Price Target: €36.00 ▲(18.23% Upside)

TXT e solutions SPA's stock score of 66.1 reflects robust financial performance and sound financial management. However, technical indicators suggest a bearish trend, and the stock's valuation appears high relative to its peers. Investors should be cautious due to potential overvaluation and bearish technical signals, despite strong financials.

Positive Factors

Capital Markets Day

The upcoming Capital Markets Day is anticipated to be a positive catalyst for the company.

Guidance Confirmation

Management confirmed the guidance for organic revenue growth and an EBITDA margin above 14%.

Revenue Growth

Quarterly results were slightly better than expected with significant revenue growth and improved margins.

Negative Factors

Cash Flow

Cash flow was negatively affected by net working capital absorption despite a positive impact from an asset sale.

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.

TXT e solutions SPA Business Overview & Revenue Model

Company Description

TXT e-solutions SPA (TXT) is a technology and service company specializing in software solutions for various industries, including aerospace, automotive, and publishing. The company focuses on providing high-quality software products and consulting services, encompassing areas such as product lifecycle management, data analytics, and cloud solutions. TXT aims to enhance operational efficiency and innovation for its clients through tailored technological solutions.

How the Company Makes Money

TXT e-solutions generates revenue primarily through the sale of software licenses, subscription fees for cloud-based services, and consulting services. Key revenue streams include software solutions tailored for specific industries, which are often sold as a one-time license or as a subscription service. Additionally, the company earns money by providing consulting and support services to help clients implement and optimize their solutions. Significant partnerships with major players in the technology and manufacturing sectors also contribute to its earnings, as they enhance its product offerings and market reach.

TXT e solutions SPA Financial Statement Overview

Summary

TXT e solutions SPA presents a robust financial profile with strong revenue growth and profitability, efficient capital management, and a stable balance sheet. The company is well-positioned within the Software - Application industry, benefiting from operational efficiencies and strategic financial management. While the financials indicate a positive trajectory, careful attention to debt levels and capital investments will be crucial to sustaining long-term growth and stability.

Income Statement

TXT e solutions SPA shows strong revenue growth with a significant increase from 2024 to TTM, indicating robust demand for its services. The company maintains healthy gross and net profit margins, which are indicative of effective cost management and profitability. EBIT and EBITDA margins further support the company's operational efficiency. However, the outstanding performance in Gross Profit Margin in earlier years has normalized to industry levels, which could be a point for further improvement.

Balance Sheet

The balance sheet of TXT e solutions SPA indicates a stable financial position with a manageable debt-to-equity ratio, suggesting a balanced approach to leveraging. Return on Equity is solid, reflecting the company's effective use of shareholders' funds to generate profits. The equity ratio is decent, showing a fair amount of the company’s assets are financed by equity, which provides a cushion against liabilities. The company's increasing assets and equity over the years are positive, though the rise in total liabilities warrants monitoring.

Cash Flow

The cash flow analysis reveals positive free cash flow growth, supporting the company's ability to invest and return value to shareholders. The operating cash flow to net income ratio is healthy, indicating good cash conversion. The company has consistently managed to generate free cash flow, showcasing effective capital expenditure management. However, fluctuations in investing cash flow suggest variable capital investments which should be monitored for long-term sustainability.

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: Negative
• Last Price: 30.45
• 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:TXT, the sentiment is Negative. The current price of 30.45 is below the 20-day moving average (MA) of 31.65, below the 50-day MA of 33.13, and below the 200-day MA of 34.37, indicating a bearish trend. The MACD of -0.89 indicates Positive momentum. The RSI at 30.45 is Neutral, neither overbought nor oversold. The STOCH value of 26.45 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
TXT	66 Neutral	€359.36M	21.37	13.06%	0.82%	39.23%	0.52%
Sector *	61 Neutral	$36.05B	6.66	-10.10%	1.86%	8.68%	-8.81%
7GV	―	€374.99M	―	-8.20%	―	―	―
7T4	―	€673.23M	164.60	1.04%	―	―	―
101	―	€91.60M	11.59	10.23%	―	―	―
9PC	―	€502.35M	47.02	31.22%	―	―	―
DGV	74 Outperform	€321.23M	9.08		2.39%	-3.76%	-9.21%