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Flow Traders (NL:FLOW)
:FLOW
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Flow Traders
(FLOW)
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Rating:60Neutral
Price Target:
€26.00
▲(11.49% Upside)
The score is held back primarily by financial quality concerns—especially the sharp deterioration in 2024 cash flow and ongoing leverage—despite a strong 2024 earnings rebound. Technicals are moderately supportive in the near term but not yet strong on a long-term basis (below the 200DMA and stretched Stochastic). Valuation is a clear positive due to the low P/E and a modest dividend yield.
Positive Factors
Revenue Growth
The significant revenue growth indicates robust business expansion and effective market penetration, enhancing long-term sustainability.
Profitability Improvements
Improved net profit margin reflects enhanced profitability, indicating effective cost management and increased shareholder value.
Leverage Management
Better leverage management reduces financial risk, improving financial stability and enhancing the company's ability to invest in growth.
Negative Factors
High Debt Levels
High debt levels can strain financial flexibility and increase vulnerability to economic downturns, impacting long-term stability.
Cash Flow Challenges
Declining free cash flow growth indicates potential liquidity issues, which could limit the company's ability to fund operations and growth initiatives.
Negative EBIT Margin
A negative EBIT margin suggests operational inefficiencies, which could hinder profitability and long-term business performance if not addressed.
Flow Traders (FLOW) vs. iShares MSCI Netherlands ETF (EWN)
Market Cap
€1.12B
Dividend Yield1.83%
Average Volume (3M)98.79K
Price to Earnings (P/E)6.0
Beta (1Y)-0.15
Revenue Growth37.22%
EPS Growth162.92%
CountryNL
Employees619
SectorFinancial
Sector Strength70
IndustryFinancial - Capital Markets
Share Statistics
EPS (TTM)1.16
Shares Outstanding45,671,646
10 Day Avg. Volume73,635
30 Day Avg. Volume98,791
Financial Highlights & Ratios
PEG Ratio0.02
Price to Book (P/B)1.22
Price to Sales (P/S)1.56
P/FCF Ratio36.58
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price TargetN/A
Price Target UpsideN/A
Rating ConsensusN/A
Number of Analyst Covering0
EPS Forecast (FY)N/A
Revenue Forecast (FY)N/A
Flow Traders Business Overview & Revenue Model
Company DescriptionFlow Traders is a leading global technology-enabled trading firm specializing in electronic market-making and proprietary trading. Founded in 2004 and headquartered in Amsterdam, the company operates across various asset classes, including equities, fixed income, commodities, and cryptocurrencies. Flow Traders leverages its advanced algorithms and technology to provide liquidity to financial markets, facilitating efficient price discovery and enhancing trading experiences for its clients.
How the Company Makes MoneyFlow Traders generates revenue primarily through market-making activities, where it earns profits by capturing the bid-ask spread on trades. As a liquidity provider, the company buys and sells financial instruments, profiting from the difference between the price at which it buys and the price at which it sells. Additionally, Flow Traders may earn revenue through proprietary trading, where it invests its own capital in various securities and derivatives. Other revenue sources include fees from executing trades on behalf of clients and partnerships with exchanges that enhance its trading capabilities. The company's robust technological infrastructure and expertise in algorithmic trading play a crucial role in optimizing its trading strategies and improving its earnings potential.
Flow Traders Earnings Call Summary
Earnings Call Date:Jul 26, 2024
(Q2-2024)
| % Change Since: |
Next Earnings Date:Feb 12, 2026
Earnings Call Sentiment Positive
The earnings call presented a generally positive outlook, with significant increases in total income and EBITDA, as well as solid performance in the digital assets and ETP markets. However, there are challenges in quarter-on-quarter declines in some areas and the suspension of dividend payments. The overall sentiment leans towards positive, but with caution regarding market volatility and strategic shifts.Q2-2024 Updates
Positive Updates
Significant Increase in Total Income and EBITDA
Total income for the second quarter was EUR 76.2 million, a 48% increase compared to the same period last year. EBITDA reached EUR 21.1 million, more than a six-fold increase from the second quarter of last year.
Growth and Diversification Strategy Validation
The results validate Flow Traders' growth and diversification strategy, with a focus on strategic growth agenda amidst a subdued trading environment.
Strong ETP Market Performance
ETP market value traded increased by 12% year-over-year. Total ETP assets under management increased by 13% in the first half of 2024 to over EUR 12 trillion.
Digital Assets and Crypto Market Expansion
Trading volume and volatility in digital assets rose significantly compared to a year ago. Flow Traders assisted with the spot bitcoin ETF launch in the U.S.
Fixed Operating Expenses Management
Fixed operating expenses in the first half of the year declined slightly while NTI increased by 29% year-over-year.
Negative Updates
Quarter-on-Quarter Decline in ETP Value Traded
ETP value traded decreased by 9% compared to the first quarter, with overall market volatility remaining subdued.
Suspension of Regular Dividend Payments
The company decided to suspend regular dividend payments to increase retained earnings for capital expansion, which may impact shareholder sentiment.
Decline in Global Crypto ETP Market Value
Global crypto ETP market value traded declined by about 30% quarter-over-quarter due to slowing fund flows into U.S. spot bitcoin ETFs.
Market Share Decline in EMEA ETP Business
Market shares in EMEA dropped in the ETP business to 25%, down from 27% at the end of Q4 2023.
Company Guidance
In the second quarter of 2024, Flow Traders saw a mixed trading environment with the total market ETP value traded rising by 12% year-over-year but declining by 9% quarter-on-quarter. Despite a 15% decrease in volatility compared to the same period last year, total income reached EUR 76.2 million, marking a 48% increase from the previous year. Trading income was EUR 79.5 million, with other income and losses amounting to EUR 3.3 million. The firm achieved an EBITDA of EUR 21.1 million, which represents a more than six-fold increase from the previous year, and the profit for the period was EUR 12.8 million, resulting in a basic EPS of EUR 0.03. The ETP market value traded increased by 12% year-over-year, but declined by 9% quarter-over-quarter, while total ETP assets under management rose by 13% to over EUR 12 trillion. In terms of expenses, fixed operating expenses slightly declined, and NTI increased by 29% year-over-year, resulting in a 40% EBITDA margin for the first half of the year. The firm plans to expand its trading capital and has secured a EUR 25 million bank term loan as part of a broader trading capital expansion strategy, suspending dividend payments to accelerate growth.Flow Traders Financial Statement Overview
Summary
Flow Traders has shown resilience in maintaining high profitability margins with strong equity and low debt levels. While revenue and operating cash flow have faced challenges, improvements in net income and strong free cash flow indicate potential for recovery and growth. The company should focus on enhancing operational efficiency to sustain long-term growth.Income Statement
Flow Traders has demonstrated moderate revenue growth with a recent decline in Total Revenue from previous years. The Gross Profit Margin remained stable at 100%, indicating strong profitability in their operations. However, the absence of EBIT and EBITDA in the most recent period suggests a potential concern for operating efficiency. Net Profit Margin has improved significantly, reflecting better net income performance.Balance Sheet
The company exhibits a strong equity position with no total debt, resulting in a very low debt-to-equity ratio. The Return on Equity increased, suggesting efficient use of shareholders' equity. The equity ratio remains healthy, indicating strong financial stability and a low risk of financial distress.Cash Flow
Flow Traders reported a decline in operating cash flow, but the Free Cash Flow remains positive, indicating effective capital expenditure management. The ratios of Operating Cash Flow and Free Cash Flow to Net Income show a solid cash generation from operations, but the declining trend in operating cash flow is a concern.| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 135.10M | 804.51M | 571.28M | 656.09M | 539.91M | 1.09B |
| Gross Profit | 135.10M | 598.00M | 390.79M | 552.57M | 476.76M | 1.03B |
| EBITDA | 58.93M | 211.65M | 62.95M | 178.55M | 160.01M | 586.20M |
| Net Income | 36.30M | 159.54M | 36.15M | 126.83M | 114.93M | 464.51M |
Balance Sheet | ||||||
| Total Assets | 15.74B | 12.90B | 13.92B | 11.10B | 10.82B | 8.45B |
| Cash, Cash Equivalents and Short-Term Investments | 8.13M | 8.39M | 5.50B | 8.61M | 4.51B | 8.35M |
| Total Debt | 3.10B | 1.96B | 2.02B | 1.68B | 1.87B | 2.58B |
| Total Liabilities | 14.92B | 12.13B | 13.33B | 10.50B | 10.32B | 7.86B |
| Stockholders Equity | 820.83M | 766.61M | 585.84M | 606.32M | 508.17M | 589.94M |
Cash Flow | ||||||
| Free Cash Flow | 1.80B | 25.48M | 67.43M | 86.15M | 238.00M | 264.63M |
| Operating Cash Flow | 1.80B | 32.06M | 79.48M | 93.75M | 244.76M | 271.26M |
| Investing Cash Flow | -1.78B | -25.85M | -17.47M | -19.72M | -13.84M | -9.39M |
| Financing Cash Flow | -18.41M | -3.78M | -64.69M | -70.59M | -234.62M | -258.87M |
Flow Traders Technical Analysis
Positive
23.32
Price Trends
24.05
Positive
24.82
Positive
26.23
Negative
Market Momentum
0.52
Negative
72.75
Negative
72.48
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For NL:FLOW, the sentiment is Positive. The current price of 23.32 is below the 20-day moving average (MA) of 24.79, below the 50-day MA of 24.05, and below the 200-day MA of 26.23, indicating a neutral trend. The MACD of 0.52 indicates Negative momentum. The RSI at 72.75 is Negative, neither overbought nor oversold. The STOCH value of 72.48 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for NL:FLOW.
Flow Traders Peers Comparison
UnderperformOutperform
Sector (68)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
74 Outperform | €24.98B | 11.50 | 9.85% | 4.36% | -12.70% | -12.34% | |
68 Neutral | $18.00B | 11.42 | 9.92% | 3.81% | 9.73% | 1.22% | |
62 Neutral | €2.28B | 18.03 | 10.57% | 7.89% | 24.42% | ― | |
62 Neutral | €4.70B | -29.91 | -7.45% | 1.65% | 8.64% | -304.46% | |
61 Neutral | €9.86B | 7.91 | 14.93% | 5.79% | -6.64% | ― | |
61 Neutral | €69.15B | 12.18 | 12.05% | 5.10% | 0.12% | -2.71% | |
60 Neutral | €1.12B | 6.01 | 24.83% | 1.83% | 37.22% | 162.92% |
* Financial Sector Average
NL:FLOW
Flow Traders
26.10
3.20
13.97%
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NL:INGA
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NL:VLK
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53.70
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NL:ALLFG
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70.08%
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.