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Tomtom Nv (NL:TOM2)
OTHER OTC:TOM2
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TomTom
(OTC:TOM2)
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Rating:54Neutral
Price Target:
€6.00
▲(3.63% Upside)
The score reflects mixed fundamentals (revenue decline and losses despite strong gross margins and manageable leverage) as the primary constraint. Technicals are supportive but look overbought, while valuation is penalized by a negative P/E and no dividend. Earnings-call commentary adds moderate support via improving margins, positive free cash flow, and raised guidance, tempered by Enterprise/customer challenges.
Positive Factors
Automotive Revenue Growth
Sustained double-digit growth in Automotive revenue reflects strengthening OEM partnerships and higher embedded content adoption. Multiyear contracts and rising vehicle integration provide recurring, contract-backed revenue, improving predictability and supporting long-term scale in a structurally growing market.
High Gross Margins
Very high and improving gross margins indicate a software- and data-rich business mix with low incremental costs. This margin profile supports durable profitability potential, enabling investment in R&D and product improvements while cushioning the P&L against moderate top-line volatility.
Solid cash position and FCF
Positive free cash flow and a strong net cash position provide financial flexibility to fund product development, pursue partnerships, and withstand enterprise cyclical weakness. Stable liquidity reduces refinancing risk and supports strategic investments without immediate need for external capital.
Negative Factors
Declining Group Revenue
A recurring decline in group revenue signals structural demand or competitive headwinds that can erode scale advantages over time. Persistent top-line contraction restricts investment capacity, pressures operating leverage, and raises execution risk for margin and growth initiatives despite pockets of strength.
Enterprise segment challenges
Dependence on a few large enterprise customers and loss of revenue from a customer developing in-house mapping undermines long-term diversification. Slower enterprise adoption reduces recurring subscription visibility and increases revenue concentration and execution risk across the segment.
Negative profitability metrics
Negative net income and a drop in revenue constrain return generation and signal persistent operating shortfalls. A negative ROE and continued losses limit the company’s ability to self-fund growth, heighten dependency on cash reserves, and could force tougher cost or strategic trade-offs over time.
TomTom (TOM2) vs. iShares MSCI Netherlands ETF (EWN)
Market Cap
€736.40M
Dividend YieldN/A
Average Volume (3M)159.61K
Price to Earnings (P/E)―
Beta (1Y)1.49
Revenue Growth-1.70%
EPS Growth24.14%
CountryNL
Employees3,600
SectorTechnology
Sector Strength88
IndustrySoftware - Application
Share Statistics
EPS (TTM)0.07
Shares Outstanding125,000,000
10 Day Avg. Volume146,318
30 Day Avg. Volume159,606
Financial Highlights & Ratios
PEG Ratio2.86
Price to Book (P/B)4.46
Price to Sales (P/S)1.08
P/FCF Ratio-146.51
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
€7.40Price Target Upside27.81% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering1
EPS Forecast (FY)N/A
Revenue Forecast (FY)N/A
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:Feb 04, 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
TomTom faces financial challenges with declining revenues and profitability issues. While the company maintains a strong gross profit margin and a manageable debt level, negative net income and cash flow concerns highlight the need for strategic improvements. The financial stability is moderate, but operational and liquidity risks persist.Income Statement
TomTom's income statement shows a challenging financial position with declining revenue and negative net income. The TTM data indicates a significant drop in revenue growth rate and negative net profit margin, suggesting operational inefficiencies. However, the gross profit margin remains strong, indicating effective cost management at the production level.Balance Sheet
The balance sheet reflects moderate financial stability with a manageable debt-to-equity ratio. However, the return on equity is negative, indicating that the company is not generating sufficient profit from its equity base. The equity ratio is relatively stable, suggesting a balanced asset structure.Cash Flow
Cash flow analysis reveals a mixed picture. The operating cash flow to net income ratio is positive, indicating some efficiency in converting income into cash. However, the free cash flow growth rate is negative, reflecting potential liquidity challenges. The free cash flow to net income ratio is relatively healthy, suggesting that the company can cover its net income with free cash flow.| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 565.73M | 574.38M | 584.76M | 536.34M | 506.93M | 528.18M |
| Gross Profit | 497.94M | 487.51M | 495.77M | 449.72M | 407.11M | 423.39M |
| EBITDA | 37.57M | 25.87M | 31.56M | -36.94M | -11.47M | -7.45M |
| Net Income | -17.25M | -17.29M | -21.01M | -102.73M | -94.65M | -257.64M |
Balance Sheet | ||||||
| Total Assets | 698.33M | 724.42M | 795.89M | 807.50M | 890.74M | 978.02M |
| Cash, Cash Equivalents and Short-Term Investments | 266.94M | 263.65M | 315.19M | 303.73M | 355.82M | 372.45M |
| Total Debt | 38.62M | 43.52M | 46.71M | 37.73M | 33.34M | 43.67M |
| Total Liabilities | 566.91M | 585.57M | 614.30M | 607.90M | 608.02M | 590.40M |
| Stockholders Equity | 131.42M | 138.85M | 181.59M | 199.61M | 282.72M | 387.62M |
Cash Flow | ||||||
| Free Cash Flow | 23.40M | -4.22M | 20.84M | -41.57M | 23.51M | -26.48M |
| Operating Cash Flow | 35.59M | 1.35M | 32.70M | -31.41M | 36.78M | -20.18M |
| Investing Cash Flow | -32.34M | 14.35M | -53.55M | -30.77M | -19.98M | 73.51M |
| Financing Cash Flow | -9.41M | -47.89M | -23.46M | -10.32M | -43.66M | -29.68M |
TomTom Technical Analysis
Positive
5.79
Price Trends
5.31
Positive
5.37
Positive
5.17
Positive
Market Momentum
0.22
Negative
84.64
Negative
89.95
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For NL:TOM2, the sentiment is Positive. The current price of 5.79 is above the 20-day moving average (MA) of 5.44, above the 50-day MA of 5.31, and above the 200-day MA of 5.17, indicating a bullish trend. The MACD of 0.22 indicates Negative momentum. The RSI at 84.64 is Negative, neither overbought nor oversold. The STOCH value of 89.95 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive 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 |
|---|---|---|---|---|---|---|---|
76 Outperform | €601.95M | 28.05 | 29.06% | 3.54% | 4.11% | 22.38% | |
71 Outperform | €1.50B | 23.18 | 7.75% | 4.11% | -3.59% | -46.68% | |
68 Neutral | €42.73M | 10.41 | 13.94% | 3.49% | 0.81% | 351.71% | |
61 Neutral | $37.18B | 12.37 | -10.20% | 1.83% | 8.50% | -7.62% | |
54 Neutral | €736.40M | -45.97 | -12.26% | ― | -1.70% | 24.14% | |
47 Neutral | €196.16M | -15.72 | ― | ― | -7.94% | 7.30% | |
46 Neutral | €152.59M | -11.43 | -57.80% | ― | 0.36% | 34.49% |
* Technology Sector Average
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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.