Sensys Gatso Group AB (SGG) AI Stock Analysis

• Market Cap: kr490.62M
• Dividend Yield: N/A
• Average Volume (3M): 6.09K
• Price to Earnings (P/E): ―
• Beta (1Y): 0.33
• Revenue Growth: 9.96%
• EPS Growth: -176.74%
• Country: SE
• Employees: 306
• Sector: General
• Sector Strength: N/A
• Industry: Hardware, Equipment & Parts
• EPS (TTM): 0.51
• Shares Outstanding: 11,530,358
• 10 Day Avg. Volume: 7,798
• 30 Day Avg. Volume: 6,090
• PEG Ratio: -2.46
• Price to Book (P/B): 1.23
• Price to Sales (P/S): 1.20
• P/FCF Ratio: -16.79
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: kr69.00
• Price Target Upside: 73.58% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 1
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 61 Neutral
• Price Target: kr45.00 ▲(13.21% Upside)

The score is driven primarily by moderate financial performance (growth and materially improved free cash flow, but ongoing profitability and leverage risks) and supportive technical momentum (price above major moving averages with positive MACD). Valuation meaningfully drags the score due to negative earnings (negative P/E) and no dividend information.

Positive Factors

Recurring revenue & public contracts

Sensys Gatso's business model includes hardware sales plus recurring maintenance and software subscriptions and long-term municipality contracts. This mix provides durable revenue visibility, higher customer retention, and a predictable base to fund R&D and operations over the next several quarters.

Material free cash flow improvement

A 239% jump in free cash flow signals substantially improved cash generation versus peers, enhancing funding for capex, software development, or debt reduction. Strong FCF reduces reliance on external financing and supports execution of long-term product and contract rollouts.

Stable gross margins and solid equity base

A near-39% gross margin indicates resilient unit economics for hardware plus software, while an equity ratio around 50% supports balance-sheet stability. Together these structural strengths help absorb cyclical spends and sustain investment in analytics and enforcement solutions.

Negative Factors

Negative profitability metrics

A negative net margin and ROE reflect ongoing profitability shortfalls despite revenue growth. Persistent losses constrain retained earnings and limit capacity to internally fund expansion or buffer cyclicality, risking dilution or higher financing costs if not reversed.

Rising leverage

Higher debt-to-equity reduces financial flexibility and raises fixed obligations. In a capital-intensive hardware and installation business, elevated leverage increases vulnerability to slower contract ramps or longer receivable cycles and may restrict strategic investments.

Low operational margins and cash conversion

Thin EBIT/EBITDA margins and a very low operating cash flow-to-income ratio suggest weak operational efficiency and potential working-capital strain. Over the medium term these factors can limit reinvestment into product development and slow margin recovery without structural improvements.

Sensys Gatso Group AB Business Overview & Revenue Model

Company Description

Sensys Gatso Group AB (publ), together with its subsidiaries, designs, develops, owns, operates, markets, and sells traffic management and enforcement solutions to nations, cities, and fleet owners worldwide. It operates through Managed Services and Systems Sales segments. The company offers speed enforcement systems, such as fixed spot, portable, moving in-vehicle, and smart in-tunnel speed, as well as dual speed warning and enforcement systems, and section control solutions; red-light enforcement system, a road safety asset for risk intersections; Automated Traffic Enforcement as a Service; and stopping violation systems for school buses, and school crossing dual warning and enforcement systems, as well as managed services. It also provides vehicle access control solutions for security and traffic management applications, including vehicle restricted urban zones, dedicated vehicle lane compliance, low emission zones, and selective short-cut enforcement; automated license plate recognition based system that helps to check vehicles on roadworthiness, insurance, registration, and tax requirements, as well as to monitor and trace the stolen vehicles and vehicles linked to national security issues. In addition, the company's back office software solutions include Flux, a sensor management platform; Puls, a data collection and analytics based software; and Xilium, a violation processing software. It serves police and road authorities, and private operators directly or through partners, agents, and distributors. The company was incorporated in 1982 and is headquartered in Jönköping, Sweden.

How the Company Makes Money

Sensys Gatso Group AB generates revenue primarily through the sale of its traffic enforcement systems and related software solutions. Key revenue streams include the direct sales of hardware such as speed and red-light cameras, as well as recurring revenue from maintenance contracts and software subscriptions. The company also benefits from partnerships with governmental agencies and municipalities, which often involve long-term contracts for the installation and operation of traffic enforcement systems. Additionally, SGG may receive revenue from consulting services related to traffic data analysis and optimization, further diversifying its income sources.

Sensys Gatso Group AB Financial Statement Overview

Summary

Sensys Gatso Group AB demonstrates moderate financial health with positive revenue growth and improved cash flow generation. However, profitability remains a concern with negative net income and low margins. The balance sheet shows increased leverage, which could pose risks if not managed carefully. Overall, the company is on a growth trajectory but needs to address profitability and leverage to enhance financial stability.

Income Statement

The company shows a moderate revenue growth rate of 3.45% in the TTM period, indicating a positive trend. However, the net profit margin is negative at -3.09%, reflecting challenges in profitability. The gross profit margin is stable at 38.65%, but the EBIT and EBITDA margins are relatively low at 4.43%, suggesting limited operational efficiency.

Balance Sheet

The debt-to-equity ratio has increased to 0.72 in the TTM period, indicating higher leverage compared to previous years. The return on equity is negative at -3.57%, highlighting profitability challenges. However, the equity ratio remains healthy at around 50.84%, suggesting a stable capital structure.

Cash Flow

The company exhibits a significant free cash flow growth rate of 239.32% in the TTM period, indicating improved cash generation. The operating cash flow to net income ratio is low at 0.065, but the free cash flow to net income ratio is strong at 1.0, reflecting efficient cash utilization despite profitability issues.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	719.26M	631.18M	623.54M	494.57M	506.79M	454.93M
Gross Profit	284.82M	241.21M	252.52M	224.91M	205.94M	161.87M
EBITDA	46.07M	23.21M	76.46M	79.59M	89.51M	56.09M
Net Income	-8.26M	5.93M	12.19M	18.56M	32.58M	5.05M
Balance Sheet
Total Assets	1.13B	1.15B	961.59M	828.25M	797.49M	767.24M
Cash, Cash Equivalents and Short-Term Investments	115.76M	165.32M	48.75M	99.72M	72.46M	108.49M
Total Debt	407.50M	381.85M	157.36M	75.67M	107.80M	108.26M
Total Liabilities	557.83M	527.23M	325.91M	202.19M	235.69M	252.69M
Stockholders Equity	577.04M	615.29M	633.10M	624.17M	561.40M	516.57M
Cash Flow
Free Cash Flow	41.84M	-44.98M	-110.72M	80.54M	-32.81M	-17.54M
Operating Cash Flow	41.84M	44.21M	-18.32M	125.55M	9.15M	15.47M
Investing Cash Flow	-98.33M	-93.39M	-102.62M	-45.01M	-41.96M	-33.01M
Financing Cash Flow	-79.71M	160.12M	70.71M	-55.18M	-3.59M	72.98M

Sensys Gatso Group AB Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 39.75
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SE:SGG, the sentiment is Positive. The current price of 39.75 is above the 20-day moving average (MA) of 39.63, above the 50-day MA of 38.81, and below the 200-day MA of 41.06, indicating a bullish trend. The MACD of 0.38 indicates Negative momentum. The RSI at 65.82 is Neutral, neither overbought nor oversold. The STOCH value of 76.59 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for SE:SGG.

Sensys Gatso Group AB Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
NOTE	66 Neutral	kr5.02B	18.70	17.21%	3.91%	-2.98%	2.44%
SGG	61 Neutral	kr490.62M	-59.22	―	―	9.96%	-176.74%
Sector *	55 Neutral	$6.65B	3.83	-15.92%	6.20%	10.91%	7.18%
ACCON	54 Neutral	kr890.62M	-35.69	-9.00%	―	-1.32%	51.89%
FING.B	46 Neutral	kr70.16M	-0.77	-37.93%	―	-82.93%	94.83%
INSP	42 Neutral	kr10.17M	-0.37	-93.13%	―	-0.75%	65.47%