Flow Traders (FLOW) AI Stock Analysis

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Flow Traders

(OTC:FLOW)

72Outperform

Flow Traders demonstrates strong financial stability with high profitability margins and a low debt level, contributing significantly to its score. Despite facing revenue and operating cash flow challenges, its valuation is attractive due to a low P/E ratio and reasonable dividend yield. Technical indicators suggest a potential short-term caution, but the long-term outlook appears positive.

Flow Traders (FLOW) vs. S&P 500 (SPY)

Market Cap

$1.20B

Dividend Yield1.57%

Average Volume (3M)352.25K

Price to Earnings (P/E)7.6

Beta (1Y)>-0.01

Revenue Growth38.76%

EPS Growth341.16%

CountryNL

Employees619

SectorFinancial

Sector Strength85

IndustryFinancial - Capital Markets

Share Statistics

EPS (TTM)3.69

Shares Outstanding45,671,646

10 Day Avg. Volume205,554

30 Day Avg. Volume352,246

Financial Highlights & Ratios

PEG Ratio0.37

Price to Book (P/B)1.59

Price to Sales (P/S)0.00

P/FCF Ratio1.24

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

$25.00

Price Target Upside-10.33% Downside

Rating ConsensusHold

Number of Analyst Covering0

Flow Traders Business Overview & Revenue Model

Company DescriptionFlow Traders (FLOW) is a leading global technology-enabled liquidity provider specializing in exchange-traded products (ETPs). Headquartered in Amsterdam, the Netherlands, Flow Traders operates across various financial markets, offering liquidity solutions for a wide range of asset classes, including equities, bonds, commodities, and cryptocurrencies. The company's robust technology infrastructure and sophisticated trading strategies enable it to efficiently facilitate trading and enhance market liquidity, serving clients worldwide.

How the Company Makes MoneyFlow Traders makes money primarily through the bid-ask spread by providing liquidity in financial markets. The company employs advanced trading algorithms and technology to facilitate high-frequency trading, enabling it to efficiently manage large volumes of trades with minimal risk. By acting as a market maker, Flow Traders buys and sells financial instruments, capturing the spread between the buying and selling prices. Key revenue streams include trading profits from diverse asset classes such as equities, fixed income, commodities, and digital assets. The company's earnings are influenced by market volatility and trading volumes, which can impact the bid-ask spreads and the frequency of trades. Additionally, Flow Traders leverages strategic partnerships with exchanges and financial institutions to enhance its market presence and optimize trading operations.

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

Positive

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

Positive

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

Positive

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.

Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
598.00M	577.10M	677.21M	542.35M	1.09B
	Gross Profit
598.00M	577.10M	677.21M	542.35M	1.09B
	EBIT
194.36M	49.17M	162.36M	144.14M	572.27M
	EBITDA
0.00	231.65M	274.75M	214.05M	633.18M
	Net Income Common Stockholders
159.54M	36.15M	126.83M	114.93M	464.51M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
8.39M	5.50B	8.31M	4.65M	8.06M
	Total Assets
12.90B	13.92B	11.10B	10.82B	8.45B
	Total Debt
0.00	2.02B	54.10M	1.87B	1.20B
	Net Debt
-8.39M	2.02B	45.79M	1.87B	1.19B
	Total Liabilities
12.13B	13.33B	10.50B	10.32B	7.86B
	Stockholders Equity
766.61M	585.84M	606.32M	508.17M	589.94M
Cash Flow		Free Cash Flow
25.48M	67.43M	86.15M	238.00M	264.63M
	Operating Cash Flow
32.06M	79.48M	93.75M	244.76M	271.26M
	Investing Cash Flow
-25.85M	-17.47M	-19.72M	-13.84M	-9.39M
	Financing Cash Flow
-3.78M	-64.69M	-70.59M	-234.62M	-258.87M

Flow Traders Technical Analysis

Technical Analysis Sentiment

Positive

Last Price27.88

Price Trends

50DMA

27.57

Positive

100DMA

25.74

Positive

200DMA

22.79

Positive

Market Momentum

MACD

>-0.01

Negative

RSI

51.96

Neutral

STOCH

39.03

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 27.88 is above the 20-day moving average (MA) of 27.53, above the 50-day MA of 27.57, and above the 200-day MA of 22.79, indicating a bullish trend. The MACD of >-0.01 indicates Negative momentum. The RSI at 51.96 is Neutral, neither overbought nor oversold. The STOCH value of 39.03 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

Overall Rating

UnderperformOutperform

Sector (64)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
NN	73 Outperform	€14.32B	9.95	7.69%	6.02%	-5.38%	38.01%
FLOW	72 Outperform	$1.20B	7.56	23.96%	1.57%	38.76%	341.16%
ABN	71 Outperform	€17.66B	7.67	10.26%	6.36%	-4.58%	-16.15%
Sector *	64 Neutral	$12.82B	9.83	7.68%	17000.34%	12.38%	-5.56%
AGN	61 Neutral	€9.63B	14.74	9.26%	5.16%	-5.08%	―
INGA	58 Neutral	€58.87B	9.61	11.97%	5.62%	0.34%	-5.20%
ALLFG	54 Neutral	€3.26B	―	-7.67%	1.82%	15.96%	-303.47%

* Financial Sector Average

Performance Comparison

NL:FLOW

Flow Traders

27.88

8.47

43.67%

NL:INGA

ING GROEP

18.95

3.58

23.29%

NL:ABN

ABN AMRO Group N.V.

21.20

6.49

44.08%

NL:AGN

Aegon NV

6.18

0.14

2.38%

NL:NN

NN Group N.V.

55.54

13.19

31.14%

NL:ALLFG

Allfunds Group plc

5.33

-0.34

-6.03%

Flow Traders Earnings Call Summary

Earnings Call Date:Feb 13, 2025

(Q2-2024)

% Change Since: 15.40%|

Next Earnings Date:Jul 31, 2025

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.

Glossary

OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.

NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.

UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

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.