Thomson Reuters (TRI) AI Stock Analysis

• Market Cap: C$122.73B
• Dividend Yield: 1.22%
• Average Volume (3M): 306.87K
• Price to Earnings (P/E): 40.9
• Beta (1Y): 0.62
• Revenue Growth: 8.16%
• EPS Growth: -5.93%
• Country: CA
• Employees: 26,400
• Sector: Industrials
• Sector Strength: 91
• Industry: Specialty Business Services
• EPS (TTM): 1.55
• Shares Outstanding: 450,478,420
• 10 Day Avg. Volume: 246,759
• 30 Day Avg. Volume: 306,870
• PEG Ratio: -19.02
• Price to Book (P/B): 7.09
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 46.96
• Enterprise Value/Market Cap: 0.72
• Enterprise Value/Revenue: 3.08
• Enterprise Value/Gross Profit: 18.97
• Enterprise Value/Ebitda: 7.67
• 1Y Price Target: C$265.70
• Price Target Upside: -2.48% Downside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 9

• Rating: 80 Outperform
• Price Target: ―

Thomson Reuters demonstrates strong financial performance with consistent revenue and profit growth, supported by effective cost control and a healthy balance sheet. The technical analysis indicates positive momentum, though caution is advised due to potential overbought conditions. The valuation appears high, reflecting a premium placed on future growth prospects. Positive earnings call outcomes and strategic corporate events further enhance growth potential, supporting a favorable overall stock score.

Positive Factors

AI Strategy

TRI is best positioned to benefit from rising AI adoption, particularly in the legal tech space.

Financial Performance

Thomson Reuters Corp reported better than expected adjusted EBITDA and EPS due to cost management, despite slightly lighter revenues.

Industry Leadership

Shenkman highlighted TRI as the clear leader, preferred by most attorneys in large US law firms.

Negative Factors

Competitive Pressure

Harvey's partnership with LexisNexis and Clio's acquisition of vLex create stronger competitors to TRI's Westlaw/CoCounsel.

Revenue Decline

Reuters News experienced a 6.7% decline in revenue year-over-year, with a significant drop in segment EBITDA.

Thomson Reuters Business Overview & Revenue Model

Company Description

Thomson Reuters (TRI) is a global leader in providing business information services. The company operates across several sectors, including legal, tax and accounting, intellectual property, and media. Its core products and services include highly specialized information-enabled software and tools for legal professionals, tax and accounting professionals, and corporations. Additionally, Thomson Reuters offers news and media services through Reuters News, a leading international news agency.

How the Company Makes Money

Thomson Reuters generates revenue through a subscription-based model for its various professional information and software tools, primarily serving legal, tax, accounting, and compliance sectors. The company earns revenue by offering these tools on a recurring subscription basis, providing customers with continuous updates and support. Additionally, Thomson Reuters monetizes its Reuters News division through licensing agreements and providing content to media outlets and financial institutions. Strategic partnerships, such as collaborations with major technology firms for data integration and analytics, play a significant role in enhancing their product offerings and expanding market reach, thereby contributing to their revenue streams.

Thomson Reuters Financial Statement Overview

Summary

Thomson Reuters presents a robust financial profile characterized by solid profitability, efficient balance sheet management, and strong cash flow generation. The company shows consistent revenue and profit growth, supported by effective cost control and a healthy equity position. While leverage is manageable, further improvements in cash flow growth and cost management could bolster financial stability and support future growth.

Income Statement

Thomson Reuters shows a solid financial performance as evidenced by a strong gross profit margin of 64.2% and a net profit margin of 29.7% for TTM (Trailing-Twelve-Months). The company has demonstrated consistent revenue growth with a 1.0% increase from the previous annual report and a robust EBIT margin of 29.1%. The EBITDA margin also remains healthy at 41.5%. This reflects both excellent operational efficiency and profitability. However, a minor decline in gross profit margin from the annual report suggests room for improvement in cost management.

Balance Sheet

The balance sheet of Thomson Reuters reflects a strong equity position with an equity ratio of 66.5% and a reasonable debt-to-equity ratio of 0.23. The return on equity stands impressively at 17.6%, indicating effective use of shareholder funds to generate income. However, the overall leverage could be a concern if debt levels rise, as indicated by total debt still being significant despite a decrease from the previous year.

Cash Flow

Thomson Reuters exhibits strong cash flow generation capabilities with a stable free cash flow to net income ratio of 0.86 and an operating cash flow to net income ratio of 1.14 for TTM (Trailing-Twelve-Months). The free cash flow growth rate remains flat, suggesting stable but not improved cash flow generation. This consistent cash flow supports ongoing investments and shareholder returns, though growth opportunities may require further improvement.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	7.27B	7.26B	6.79B	6.63B	6.35B	5.98B
Gross Profit	4.67B	5.76B	2.70B	4.22B	3.87B	3.71B
EBITDA	3.02B	3.05B	2.95B	3.01B	2.02B	2.76B
Net Income	2.16B	2.21B	2.69B	1.89B	-553.00M	1.69B
Balance Sheet
Total Assets	18.48B	18.44B	18.68B	21.71B	22.15B	17.88B
Cash, Cash Equivalents and Short-Term Investments	1.41B	1.89B	1.36B	1.27B	886.00M	2.40B
Total Debt	2.81B	3.08B	3.54B	4.76B	3.79B	3.77B
Total Liabilities	6.18B	6.43B	7.62B	9.76B	8.31B	7.90B
Stockholders Equity	12.30B	12.01B	11.06B	11.95B	13.83B	9.98B
Cash Flow
Free Cash Flow	1.86B	1.85B	1.80B	1.32B	1.29B	1.24B
Operating Cash Flow	2.47B	2.46B	2.34B	1.92B	1.77B	1.75B
Investing Cash Flow	-707.00M	680.00M	3.51B	-462.00M	-504.00M	-138.00M
Financing Cash Flow	-2.28B	-2.46B	-5.63B	-1.16B	-2.27B	-644.00M

Thomson Reuters Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 272.45
• 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 TSE:TRI, the sentiment is Positive. The current price of 272.45 is above the 20-day moving average (MA) of 270.35, above the 50-day MA of 266.92, and above the 200-day MA of 244.61, indicating a bullish trend. The MACD of 2.29 indicates Negative momentum. The RSI at 55.22 is Neutral, neither overbought nor oversold. The STOCH value of 68.41 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for TSE:TRI.

Thomson Reuters Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
TRI	80 Outperform	C$122.73B	40.86	18.46%	1.22%	8.16%	-5.93%
TCL.B	74 Outperform	C$1.71B	9.69	9.65%	9.18%	-2.58%	100.21%
TCL.A	73 Outperform	C$1.71B	9.53	9.65%	4.42%	-2.58%	100.21%
Sector *	71 Outperform	¥254.45B	13.41	8.48%	3.03%	6.31%	12.90%
RBA	70 Outperform	$27.41B	52.12	7.74%	1.08%	5.58%	27.23%

Thomson Reuters Corporate Events

Thomson Reuters Completes Note Exchange and Plans New Prospectus

Thomson Reuters announced the completion of its exchange offers and consent solicitations for certain series of notes, aimed at optimizing its capital structure. The exchange allows holders of old notes to receive new notes issued by TR Finance LLC, a subsidiary, with similar financial terms. This move is expected to align revenue generation with indebtedness and improve the company’s financial flexibility. The company also plans to file a new base shelf prospectus to update guarantees and reflect changes in its financial arrangements.