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Tomtom Nv (NL:TOM2)
:TOM2
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TomTom
(TOM2)
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Rating:57Neutral
Price Target:
€5.50
▼(-5.01% Downside)
Action:ReiteratedDate:02/06/26
The score is driven primarily by improving fundamentals (strong margins and a 2025 cash flow rebound) and a constructive earnings update with stronger Automotive trends and guidance near the upper end. This is materially offset by weak technicals (price below key averages with bearish momentum) and valuation risk due to persistent losses (negative P/E).
Positive Factors
High gross margins
Sustained gross margins near 80–89% indicate durable product economics and pricing power for TomTom's mapping and software. High gross profitability supports reinvestment in R&D, funds software-led scaling, and cushions operating leverage during revenue cyclicality, aiding long‑term margin sustainability.
Rebound in cash generation
A meaningful 2025 cash flow rebound to positive operating and free cash flow demonstrates TomTom's ability to self-fund operations and strategic initiatives. Improved cash conversion reduces reliance on external financing, supports working capital and partnership execution, and improves balance sheet flexibility over the medium term.
Strengthening Automotive franchise & partnerships
Double-digit Automotive growth and a multiyear Hyundai expansion plus a next‑generation Automotive Navigation Application reflect structural traction with OEMs. Deepening OEM partnerships and product differentiation drive recurring licensing and higher‑margin software revenues, strengthening long‑term market position in automotive telematics.
Negative Factors
Persistent net losses
Despite margin strength, TomTom has recorded negative net income and negative returns on equity historically. Continued losses erode equity, limit retained earnings for organic investment, and constrain shareholder returns unless operating profits consistently materialize, posing a durable profitability risk.
Flat-to-declining revenue trend
Stagnant to slightly declining top-line reduces the leverage potential of strong gross margins and limits sustainable profit growth. Without consistent revenue expansion across segments, margin improvements may be offset by structural demand weakness, making durable earnings recovery dependent on successful commercial execution.
Enterprise concentration / major customer loss
Dependence on large enterprise customers creates concentration risk: when a major client insources mapping, it materially depresses Enterprise revenue. Such customer-level structural losses weaken recurring revenue visibility and require diversification to restore resilient revenue streams over the medium term.
TomTom (TOM2) vs. iShares MSCI Netherlands ETF (EWN)
Market Cap
€635.23M
Dividend YieldN/A
Average Volume (3M)159.61K
Price to Earnings (P/E)―
Beta (1Y)1.63
Revenue Growth-1.70%
EPS Growth24.14%
CountryNL
Employees3,600
SectorTechnology
Sector Strength88
IndustrySoftware - Application
Share Statistics
EPS (TTM)0.04
Shares Outstanding125,000,000
10 Day Avg. Volume146,318
30 Day Avg. Volume159,606
Financial Highlights & Ratios
PEG Ratio1.68
Price to Book (P/B)4.88
Price to Sales (P/S)1.23
P/FCF Ratio15.62
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)0.23
Revenue Forecast (FY)€559.75M
TomTom Business Overview & Revenue Model
Company DescriptionTomTom N.V. (TOM2) is a Dutch company specializing in location technology and navigation solutions. Founded in 1991, TomTom operates primarily in the automotive, consumer, and business sectors, providing a range of products and services including GPS navigation devices, mapping software, and location-based services. The company is widely recognized for its innovative mapping technology and real-time traffic data, which are utilized across various industries to enhance navigation experiences and optimize fleet management.
How the Company Makes MoneyTomTom generates revenue through several key streams, primarily from its Automotive, Telematics, and Consumer divisions. In the Automotive sector, the company partners with major automotive manufacturers to provide embedded navigation systems and location services, earning revenue through licensing agreements and software sales. In the Telematics division, TomTom offers solutions for fleet management and transportation, generating income from subscription services and data analytics. The Consumer segment includes sales of standalone GPS devices and mobile applications, contributing to direct product sales revenue. Additionally, partnerships with technology companies and integration of location services into third-party applications further enhance TomTom's revenue potential, allowing the company to monetize its mapping data and traffic information through various licensing agreements.
TomTom Earnings Call Summary
Earnings Call Date:Oct 14, 2025
(Q3-2025)
| % Change Since: |
Next Earnings Date:Apr 16, 2026
Earnings Call Sentiment Neutral
The earnings call highlighted significant achievements in the Automotive sector, with strong revenue growth and strategic partnerships. However, challenges remain in the Enterprise segment, with a notable decline in group revenue and issues with a major customer. Despite these challenges, the company has raised its revenue guidance, reflecting confidence in its future performance.Q3-2025 Updates
Positive Updates
Automotive Navigation Application Launch
TomTom launched its next-generation Automotive Navigation Application, setting a new benchmark for user experience and flexibility in the industry.
Expansion with Hyundai
TomTom expanded its partnership with Hyundai, securing a multiyear agreement to provide real-time traffic and speed camera services across Europe.
Automotive Revenue Growth
Automotive operational revenue increased by 22% year-on-year to EUR 85 million, driven by new vehicle lines and recovery in production volumes.
Gross Margin Improvement
Gross margin improved to 89%, up from 87% last year, due to a greater share of higher margin content and software revenue.
Free Cash Flow Increase
Free cash flow rose to EUR 17 million, compared with EUR 15 million last year.
Positive Outlook and Revenue Guidance Increase
TomTom increased its expectations for full-year group revenue and Location Technology revenue to approach the upper end of the previously communicated guidance range.
Negative Updates
Decline in Group Revenue
Group revenue decreased to EUR 137 million from EUR 141 million in the same period last year.
Slow Enterprise Adoption
Enterprise revenue was stable quarter-on-quarter at EUR 39 million, with currency movements adding pressure and slower than expected growth.
Challenges with a Major Customer
A well-documented decline in revenue from a major customer who is building their own map, affecting the overall Enterprise segment performance.
Company Guidance
During the third quarter 2025 results conference call, TomTom provided a detailed overview of its financial and operational performance. The company reported a group revenue of EUR 137 million, down from EUR 141 million in the same period last year, with Location Technology revenue totaling EUR 118 million. Automotive operational revenue saw a significant year-on-year increase of 22% to EUR 85 million. The gross margin improved to 89%, up from 87% the previous year. Operating expenses decreased to EUR 114 million, reflecting strong cost discipline and lower amortization charges. Free cash flow was an inflow of EUR 17 million, excluding EUR 14 million in restructuring charges. The net cash position remained stable at EUR 267 million. Looking ahead, TomTom expects full-year group revenue and Location Technology revenue to approach the upper end of its previously communicated guidance range, with free cash flow estimated at around 5% of group revenue. The company remains optimistic about its long-term growth prospects, particularly in the automotive sector, where it has secured new partnerships and is seeing increasing interest in its products.TomTom Financial Statement Overview
Summary
Strong gross margins (~80–89%) and a meaningful 2025 cash flow rebound (positive operating and free cash flow) support the score. However, revenue has been flat-to-down and net income remains negative, with an uneven cash flow history that raises durability questions.Income Statement
Revenue has been broadly flat to slightly down in recent years (2025 down ~2% after small declines in 2024, following growth in 2022–2023). A key positive is consistently strong gross profitability (gross margin ~80–88%), suggesting solid product economics. However, the company is still struggling to convert this into bottom-line profits: net income remains negative across all shown years, though losses have narrowed materially versus 2020–2022, and 2025 shows near break-even operating profit (small positive EBIT) after multiple years of operating losses.56
Neutral
Balance Sheet
Leverage looks manageable with debt modest relative to equity (debt-to-equity ~0.19–0.52 across the period), which supports financial flexibility. Total assets are stable-to-down slightly over time, and equity has come down from earlier years, indicating some balance sheet erosion during loss-making periods. Returns on equity are negative each year, reflecting the ongoing lack of profitability and limiting the quality of the equity base despite reasonable leverage.63
Positive
Cash Flow
Cash generation improved meaningfully in 2025, with solid positive operating cash flow (~€47m) and positive free cash flow (~€44m), a sharp rebound from weak/negative free cash flow in 2024 and negative operating cash flow in 2022 and 2020. Free cash flow has been volatile year to year, but the latest year shows strong recovery and better cash discipline. A watch item is that cash flow has not been consistently strong through the cycle, so durability of the 2025 step-up remains the key question.70
Positive
| Breakdown | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 554.69M | 574.38M | 584.76M | 536.34M | 506.93M |
| Gross Profit | 490.56M | 487.51M | 495.77M | 449.72M | 407.11M |
| EBITDA | 20.88M | 25.87M | 31.56M | -36.94M | -11.47M |
| Net Income | -6.40M | -17.29M | -21.01M | -102.73M | -94.65M |
Balance Sheet | |||||
| Total Assets | 716.19M | 724.42M | 795.89M | 807.50M | 890.74M |
| Cash, Cash Equivalents and Short-Term Investments | 262.80M | 263.65M | 315.19M | 303.73M | 355.82M |
| Total Debt | 72.14M | 43.52M | 46.71M | 37.73M | 33.34M |
| Total Liabilities | 576.57M | 585.57M | 614.30M | 607.90M | 608.02M |
| Stockholders Equity | 139.62M | 138.85M | 181.59M | 199.61M | 282.72M |
Cash Flow | |||||
| Free Cash Flow | 43.59M | -4.22M | 20.84M | -41.57M | 23.51M |
| Operating Cash Flow | 46.91M | 1.35M | 32.70M | -31.41M | 36.78M |
| Investing Cash Flow | -8.61M | 14.35M | -53.55M | -30.77M | -19.98M |
| Financing Cash Flow | -10.27M | -47.89M | -23.46M | -10.32M | -43.66M |
TomTom Technical Analysis
Negative
5.79
Price Trends
5.80
Negative
5.58
Negative
5.39
Negative
Market Momentum
-0.24
Positive
35.79
Neutral
38.41
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For NL:TOM2, the sentiment is Negative. The current price of 5.79 is above the 20-day moving average (MA) of 5.41, below the 50-day MA of 5.80, and above the 200-day MA of 5.39, indicating a bearish trend. The MACD of -0.24 indicates Positive momentum. The RSI at 35.79 is Neutral, neither overbought nor oversold. The STOCH value of 38.41 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for NL:TOM2.
TomTom Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
73 Outperform | €564.33M | 23.37 | 29.06% | 3.54% | 4.11% | 22.38% | |
71 Outperform | €1.56B | 24.62 | 7.75% | 4.11% | -3.59% | -46.68% | |
68 Neutral | €42.45M | 10.34 | 13.94% | 3.49% | 0.81% | 351.71% | |
61 Neutral | $37.18B | 12.37 | -10.20% | 1.83% | 8.50% | -7.62% | |
57 Neutral | €635.23M | -100.98 | -12.26% | ― | -1.70% | 24.14% | |
53 Neutral | €170.50M | -44.57 | -57.80% | ― | 0.36% | 34.49% | |
47 Neutral | €183.21M | -14.64 | ― | ― | -7.94% | 7.30% |
* Technology Sector Average
NL:TOM2
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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.