TXT e solutions SPA (TXT) AI Stock Analysis

• Market Cap: €383.47M
• Dividend Yield: 0.82%
• Average Volume (3M): 32.66K
• Price to Earnings (P/E): 22.7
• Beta (1Y): 0.52
• Revenue Growth: 28.77%
• EPS Growth: -3.40%
• Country: IT
• Employees: 3,282
• Sector: Technology
• Sector Strength: 88
• Industry: Software - Application
• EPS (TTM): 0.35
• 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: €43.70
• Price Target Upside: 43.28% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 2
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 64 Neutral
• Price Target: €35.00 ▲(14.75% Upside)

TXT e solutions SPA's overall stock score is driven by strong revenue growth and stable profitability, although concerns about declining gross profit margins and increased leverage persist. Technical indicators suggest a neutral trend, and valuation metrics indicate moderate pricing. The absence of earnings call data and corporate events limits further insights.

Positive Factors

Revenue Growth

The robust revenue growth rate indicates effective market expansion and product adoption, supporting long-term business sustainability.

Market Position

Specialization in software solutions for industries like aerospace and automotive strengthens TXT's market position and client retention.

Return on Equity

A solid return on equity indicates efficient management and effective capital utilization, enhancing shareholder value over time.

Negative Factors

Declining Gross Profit Margin

A declining gross profit margin suggests rising cost pressures, which could impact profitability if not managed effectively.

Increased Leverage

Increased leverage poses financial risk, potentially limiting flexibility and increasing vulnerability to economic downturns.

Weakened Cash Flow Generation

Decreased cash flow generation can strain liquidity and limit the company's ability to invest in growth opportunities.

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, 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 shows strong revenue growth and stable profitability, with a revenue growth rate of 7.85% TTM and a net profit margin of 5.11%. However, the decline in gross profit margin and increased leverage are concerns, along with weakened cash flow generation.

Income Statement

TXT e solutions SPA has demonstrated a strong revenue growth rate of 7.85% TTM, indicating robust expansion. The gross profit margin is healthy at 24.84%, although it has decreased from previous years. The net profit margin is stable at 5.11%, showing consistent profitability. However, the decline in gross profit margin from earlier periods suggests potential cost pressures.

Balance Sheet

The company's debt-to-equity ratio of 1.26 TTM indicates a moderate level of leverage, which is higher than previous years, posing some risk. Return on equity is solid at 12.20%, reflecting effective use of equity to generate profits. The equity ratio is not explicitly calculated, but the balance sheet shows a stable equity base.

Cash Flow

TXT e solutions SPA's free cash flow has decreased by 23.53% TTM, which is a concern. The operating cash flow to net income ratio is 0.16, indicating that cash generation from operations is lower relative to net income. The free cash flow to net income ratio of 0.65 suggests moderate cash conversion efficiency.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	355.45M	304.54M	224.39M	150.76M	96.36M	68.75M
Gross Profit	87.47M	76.28M	35.20M	109.32M	75.60M	55.19M
EBITDA	48.71M	38.27M	35.80M	24.06M	15.31M	9.74M
Net Income	17.99M	15.90M	15.51M	11.99M	7.87M	4.47M
Balance Sheet
Total Assets	492.48M	448.38M	302.24M	300.78M	226.06M	173.45M
Cash, Cash Equivalents and Short-Term Investments	85.91M	75.53M	61.99M	81.50M	84.37M	80.09M
Total Debt	201.84M	183.03M	112.80M	114.53M	87.95M	52.89M
Total Liabilities	332.21M	296.55M	188.37M	191.40M	132.99M	87.58M
Stockholders Equity	157.25M	149.76M	113.85M	109.37M	92.65M	85.45M
Cash Flow
Free Cash Flow	13.62M	16.66M	8.03M	16.37M	7.07M	-2.31M
Operating Cash Flow	24.18M	26.76M	22.19M	18.16M	8.53M	-1.16M
Investing Cash Flow	-46.70M	-49.02M	11.09M	-32.48M	-10.27M	7.14M
Financing Cash Flow	55.01M	42.64M	-28.77M	11.01M	25.88M	-5.46M

TXT e solutions SPA Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 30.50
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• 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 Negative. The current price of 30.5 is below the 20-day moving average (MA) of 32.63, below the 50-day MA of 32.57, and below the 200-day MA of 33.67, indicating a bearish trend. The MACD of -0.55 indicates Positive momentum. The RSI at 39.49 is Neutral, neither overbought nor oversold. The STOCH value of 12.24 is Positive, 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	€290.18M	15.39	―	2.85%	-24.28%	-57.55%
TXT	64 Neutral	€383.47M	22.74	12.61%	0.82%	28.77%	-3.40%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
TNXT	60 Neutral	€676.90M	-151.13	-1.19%	2.03%	14.90%	-123.79%
WIIT	54 Neutral	€512.91M	51.06	25.60%	1.64%	13.74%	-25.04%
IOT	51 Neutral	€445.47M	-28.56	-3.24%	―	1.84%	-15.49%