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Tomtom Nv (NL:TOM2)
:TOM2
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TomTom
(TOM2)
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Rating:54Neutral
Price Target:
€5.00
▼(-13.64% Downside)
Action:ReiteratedDate:03/07/26
The score is primarily supported by improving fundamentals—high gross margins and a sharp 2025 improvement in operating and free cash flow—while being held back by weak technicals (trading below key moving averages with negative MACD) and loss-driven valuation signals (negative P/E).
Positive Factors
High gross margins
Very high gross margins (~80–88%) indicate strong product economics and pricing power in mapping and navigation. This structural margin advantage allows revenue to flow to operating profit more quickly as costs scale, supporting long-term profitability if revenues stabilize or resume growth.
2025 cash-flow rebound
A sharp improvement to positive operating and free cash flow in 2025 demonstrates improved cash generation and discipline. Durable free cash flow supports reinvestment in product development, funds partnerships, and reduces reliance on external financing if the company sustains this improved cash conversion.
Manageable leverage
Relatively low debt-to-equity provides balance-sheet flexibility and limits refinancing risk, enabling continued R&D and commercial partnerships. Manageable leverage improves the company's ability to absorb cyclical stress and fund strategic initiatives without undue strain on cash flow.
Negative Factors
Stagnant revenue trend
A multi-year pattern of flat to slightly declining revenue limits operating leverage benefits from high gross margins. Without sustained top-line growth, margin advantage alone may not translate into durable profit expansion or justify higher reinvestment in product development and market expansion.
Ongoing net losses
Persistent net losses and negative ROE have eroded equity and constrain capital allocation. Even with recent EBIT improvement, the company must sustain profitability to rebuild shareholder equity and fund growth internally; otherwise it may need external capital or cutbacks.
Volatile cash generation
Historic volatility in operating and free cash flow raises execution risk: a single-year rebound is useful but not proof of sustained cash generation. If cash flow reverts, investment plans, debt servicing and R&D budgets could be constrained, undermining long-term strategy execution.
TomTom (TOM2) vs. iShares MSCI Netherlands ETF (EWN)
Market Cap
€549.75M
Dividend YieldN/A
Average Volume (3M)159.61K
Price to Earnings (P/E)33.2
Beta (1Y)1.59
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)0.22
Revenue Forecast (FY)€547.53M
TomTom Business Overview & Revenue Model
Company DescriptionTomTom N.V. develops and sells navigation and location-based products and services worldwide. The company operates in two segments, Location Technology and Consumer. It offers standard definition, advanced driver assistance system (ADAS), high definition (HD) maps, and map data, as well as places for map products; traffic and travel information products, including real-time traffic, hazard warning, speed camera, speed profile, road analytics, fuel and weather services, electric vehicle (EV) and parking services, and routing; and navigation products, such as navigation engine, traffic and travel information, navigation user interface, EV routing and range, and maps for automotive. The company also provides AutoStream, a solution that enables fast and efficient map delivery of the TomTom automated driving (AD) and ADAS Maps; RoadCheck, a tool for carmakers to determine when, where, and under what conditions their vehicles can safely activate AD functions; TomTom indigo, a digital cockpit platform; and virtual horizon products. In addition, it offers road analytics solutions, including traffic stats, origin destination analysis, route monitoring, road event reporter, and junction analytics; and shop products, such as navigation devices, accessories, and map updates, as well as support services. The company serves the automotive, fleet management and logistics, mobility and on-demand, road traffic management, and location intelligence industries. TomTom N.V. was founded in 1991 and is headquartered in Amsterdam, the Netherlands.
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 (~80–88%) and a notable 2025 cash-flow rebound (positive operating cash flow and free cash flow) support the score. However, revenue has been flat to slightly down and net income remains negative, with only near break-even operating performance in 2025.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
5.55
Negative
5.45
Negative
5.38
Negative
Market Momentum
-0.26
Positive
24.69
Positive
3.72
Positive
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 4.90, above the 50-day MA of 5.55, and above the 200-day MA of 5.38, indicating a bearish trend. The MACD of -0.26 indicates Positive momentum. The RSI at 24.69 is Positive, neither overbought nor oversold. The STOCH value of 3.72 is Positive, 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 | €511.78M | 24.15 | 29.06% | 3.54% | 4.11% | 22.38% | |
61 Neutral | $37.18B | 12.37 | -10.20% | 1.83% | 8.50% | -7.62% | |
59 Neutral | €1.47B | 15.43 | 11.04% | 4.11% | -3.59% | -46.68% | |
55 Neutral | €39.62M | 12.03 | 11.31% | 3.49% | 0.81% | 351.71% | |
54 Neutral | €549.75M | 33.21 | -12.26% | ― | -1.70% | 24.14% | |
53 Neutral | €167.84M | -37.50 | -13.96% | ― | 0.36% | 34.49% | |
47 Neutral | €150.60M | -17.52 | ― | ― | -7.94% | 7.30% |
* 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.