Sinch AB (SINCH) AI Stock Analysis

• Market Cap: $27.98B
• Dividend Yield: N/A
• Average Volume (3M): 2.55M
• Price to Earnings (P/E): ―
• Beta (1Y): 1.54
• Revenue Growth: -0.30%
• EPS Growth: -3365.84%
• Country: SE
• Employees: 3,557
• Sector: Communication Services
• Sector Strength: 97
• Industry: Telecommunications Services
• EPS (TTM): 0.50
• Shares Outstanding: 844,936,000
• 10 Day Avg. Volume: 2,007,619
• 30 Day Avg. Volume: 2,545,140
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• Enterprise Value/Market Cap: 1.02
• Enterprise Value/Revenue: 1.00
• Enterprise Value/Gross Profit: 2.30
• Enterprise Value/Ebitda: -34.83
• 1Y Price Target: $28.04
• Price Target Upside: -15.53% Downside
• Rating Consensus: Hold
• Number of Analyst Covering: 3

• Rating: 58 Neutral
• Price Target: kr35.00 ▲(5.45% Upside)

Sinch AB's overall stock score is driven by its challenging financial performance, with declining revenues and negative profitability margins. However, positive technical indicators and strong earnings call highlights, such as gross profit growth and AI advancements, provide some optimism. The valuation remains a concern due to the negative P/E ratio and lack of dividend yield.

Sinch AB Business Overview & Revenue Model

Company Description

Sinch AB (publ) provides cloud communications services and solutions for enterprises and mobile operators in Sweden, France, the United Kingdom, Germany, Brazil, India, Singapore, other European countries, the United States, and internationally. It operates through four segments: Messaging, Voice and Video, Email, and Operators. The company offers conversation, messaging, verification, and calling APIs, channels, numbers, and inteliquent and solutions, which include marketing team, operations, customer service, conversational marketing, commerce, and care, as well as mobile identity and security. It serves to financial services, healthcare, media and entertainment, retail, telecommunication, and travel and transport industries. The company was formerly known as CLX Communications AB (publ) and changed its name to Sinch AB (publ) in July 2019. Sinch AB (publ) was founded in 2008 and is headquartered in Stockholm, Sweden.

How the Company Makes Money

Sinch generates revenue primarily through its subscription-based model, where businesses pay for access to its communication APIs and services. Key revenue streams include charges for SMS and voice communication, where customers are billed based on usage volume, as well as monthly fees for premium services and features. Additionally, Sinch benefits from significant partnerships with telecom operators and technology companies, which enhance its service offerings and expand its customer base. The company's focus on innovation and integration of emerging technologies further contributes to its earnings, as it continually adapts to meet the evolving needs of businesses in the digital communication landscape.

Sinch AB Financial Statement Overview

Summary

Sinch AB faces significant financial challenges, with declining revenues, negative profitability margins, and mixed cash flow performance. The balance sheet shows a strong equity position but is offset by negative returns on equity. The company needs to address its operational inefficiencies and improve cash flow generation to enhance its financial health.

Income Statement

Sinch AB's income statement reveals a challenging financial period. The TTM data shows a negative revenue growth rate of -1.47%, indicating a decline in sales. The gross profit margin is at 43.37%, which is relatively healthy, but the net profit margin is significantly negative at -22.56%, reflecting substantial losses. The EBIT and EBITDA margins are also negative, highlighting operational inefficiencies. Overall, the company faces profitability challenges, with declining revenues and negative margins.

Balance Sheet

The balance sheet shows moderate financial stability. The debt-to-equity ratio is 0.23, indicating a conservative leverage position. However, the return on equity is negative at -23.68%, reflecting the company's inability to generate profits from its equity base. The equity ratio stands at 60.76%, suggesting a strong equity position relative to total assets. While the company maintains a solid equity base, the negative ROE is a concern.

Cash Flow

Cash flow analysis indicates mixed results. The free cash flow growth rate is negative at -20.80%, signaling a decline in cash generation. The operating cash flow to net income ratio is 0.27, suggesting that operating cash flows are not sufficient to cover net losses. The free cash flow to net income ratio is 0.69, indicating some level of cash flow support despite net losses. Overall, the cash flow situation is challenging, with declining free cash flow and insufficient operating cash flow coverage.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	28.54B	28.71B	28.75B	27.72B	16.18B	8.02B
Gross Profit	12.38B	10.07B	2.51B	8.81B	3.93B	2.18B
EBITDA	-819.00M	-3.20B	3.13B	-1.96B	1.96B	686.38M
Net Income	-6.44B	-6.41B	42.00M	-4.94B	907.00M	445.91M
Balance Sheet
Total Assets	42.11B	48.00B	53.13B	57.28B	57.08B	11.63B
Cash, Cash Equivalents and Short-Term Investments	717.00M	1.08B	1.01B	2.17B	1.87B	3.12B
Total Debt	5.96B	7.09B	2.36B	11.34B	12.52B	1.13B
Total Liabilities	16.52B	18.98B	19.47B	22.85B	23.03B	4.12B
Stockholders Equity	25.58B	29.02B	33.66B	34.43B	34.05B	7.51B
Cash Flow
Free Cash Flow	1.45B	2.35B	1.16B	1.86B	150.37M	337.56M
Operating Cash Flow	2.10B	2.94B	1.79B	2.51B	328.71M	453.92M
Investing Cash Flow	-660.00M	-604.00M	-649.00M	-691.00M	-29.06B	-2.97B
Financing Cash Flow	-1.40B	-2.23B	-2.34B	-1.51B	26.45B	5.23B

Sinch AB Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 33.19
• 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:SINCH, the sentiment is Positive. The current price of 33.19 is above the 20-day moving average (MA) of 32.44, above the 50-day MA of 31.02, and above the 200-day MA of 26.78, indicating a bullish trend. The MACD of 0.63 indicates Negative momentum. The RSI at 57.35 is Neutral, neither overbought nor oversold. The STOCH value of 51.62 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for SE:SINCH.

Sinch AB Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
TEL2.B	―	kr104.09B	24.34	20.60%	4.19%	0.51%	14.15%
TELIA	―	$140.70B	34.33	10.93%	5.45%	-5.76%	-10.05%
BRE2	―	kr2.76B	25.00	―	5.20%	9.75%	12.84%
Sector *	―	$48.67B	4.58	-11.27%	4.14%	2.83%	-41.78%
SINCH	―	$27.98B	-4.34	-20.55%	―	-0.30%	-3365.84%
TRANS	―	kr502.53M	28.89	3.44%	―	8.67%	-49.01%
NETEL	―	kr229.22M	―	―	―	-13.07%	-372.35%

Sinch AB Corporate Events

Sinch AB Approves Long-term Incentive Program for Employees

Sinch AB held an extraordinary general meeting to approve a long-term incentive program, LTI 2025, for up to 625 employees, offering stock options with performance and time-based vesting conditions. The meeting also resolved to hedge financial exposure related to LTI 2025 through a share swap agreement with a third party, as the proposal for the board to acquire own shares did not pass.

The most recent analyst rating on (SE:SINCH) stock is a Buy with a SEK38.30 price target. To see the full list of analyst forecasts on Sinch AB stock, see the SE:SINCH Stock Forecast page.

Sinch AB Increases Share Count Following Stock Option Exercise

Sinch AB announced an increase in its total number of shares and votes to 844,935,967 due to the issuance of 311,881 new shares following the exercise of stock options within its incentive programs. This development reflects Sinch’s ongoing growth and commitment to incentivizing its workforce, potentially impacting its market position and shareholder value.

The most recent analyst rating on (SE:SINCH) stock is a Buy with a SEK43.00 price target. To see the full list of analyst forecasts on Sinch AB stock, see the SE:SINCH Stock Forecast page.

Sinch AB Reports Steady Growth Amid Currency Challenges

Sinch AB is a global leader in cloud communications for mobile customer engagement, specializing in messaging, voice, and video solutions across various industries. The company operates primarily in the Communications Platform as a Service (CPaaS) sector, known for its robust platform that supports a wide range of communication channels.

Sinch AB Earnings Call: Growth Amid Challenges

Sinch AB’s recent earnings call conveyed an optimistic sentiment, underscored by notable achievements in gross profit growth and improved EBITDA margins. The company is making strategic strides in AI and product innovation, although challenges such as low organic net sales growth and currency fluctuations persist. Despite these hurdles, Sinch’s financial standing has strengthened, and initiatives like the share buyback program signal a positive outlook.