ALTEN SA (ATE) AI Stock Analysis

• Market Cap: €2.59B
• Dividend Yield: 2%
• Average Volume (3M): 63.15K
• Price to Earnings (P/E): 14.1
• Beta (1Y): 1.36
• Revenue Growth: 1.83%
• EPS Growth: -22.29%
• Country: FR
• Employees: 56,373
• Sector: Industrials
• Sector Strength: 91
• Industry: Information Technology Services
• EPS (TTM): 5.29
• Shares Outstanding: 35,266,865
• 10 Day Avg. Volume: 60,166
• 30 Day Avg. Volume: 63,149
• PEG Ratio: -0.59
• Price to Book (P/B): 1.14
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 6.07
• 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: €91.00
• Price Target Upside: 22.23% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 2

ALTEN SA's stock shows strong financial performance with robust growth and cash flow, countered by declining margins and return on equity. Technical indicators suggest bearish sentiment, with prices below moving averages and approaching oversold conditions. The valuation is fair, with a reasonable P/E ratio and modest dividend yield. These factors combine to create a balanced but cautious outlook.

Positive Factors

Earnings Forecast

These results, which are less poor than expected, have finally led us to raise our 2025e adjusted EPS by +8%.

Negative Factors

Operating Profit

Operating profit still decreasing in FY24.

Project Postponements

Project postponements are multiplying rapidly, particularly in the automotive and aerospace sectors, affecting several regions.

Sales Forecast

Alten constantly lowers its revenue forecasts, with sales potentially declining in the fourth quarter of 2024 and no clear growth catalysts for 2025.

Workforce Reduction

There are currently no signs of a recovery and the group started 2025 with -3.4% fewer engineers than it had on average in 2024.

ALTEN SA Business Overview & Revenue Model

Company Description

Alten S.A. operates as an engineering and technology consultancy company in France, North America, Germany, Scandinavia, Benelux, Spain, Italy, the United Kingdom, the Asia-Pacific, Switzerland, Eastern Europe, and internationally. The company undertakes design and research projects for the technical and information systems divisions in the industrial, telecommunications, and service sectors. It offers engineering, and research and development outsourcing services, such as digital transformation; product design and development; manufacturing engineering; supply chain and quality; customer service and training; and project and change management services. The company also provides IT services comprising consulting and digital transformation; technical services for digital, big data, data science, and artificial intelligence; development, maintenance, and testing of applications; and cloud, and networks and security infrastructure services. It serves customers in aeronautics, space, defense and naval, security, automotive, rail, energy and environment, life sciences, banking, finance, insurance, telecoms and media, retail and consumer services, and public sectors. Alten S.A. was incorporated in 1988 and is based in Boulogne-Billancourt, France.

How the Company Makes Money

ALTEN SA generates revenue through a diversified model centered on providing consulting services in engineering and technology. The company engages in project-based contracts with clients across various industries, offering expertise in R&D, IT, and digital solutions. Revenue is primarily derived from consulting fees charged to clients, which are based on the scope, duration, and complexity of the projects. ALTEN's strong presence in multiple sectors allows it to capitalize on industry-specific growth trends and technological advancements. Additionally, the company benefits from long-standing relationships with major corporations, which contribute to a stable and recurring revenue stream. Strategic partnerships and collaborations also enhance ALTEN's market reach and service offerings, further supporting its revenue generation capabilities.

ALTEN SA Financial Statement Overview

Summary

Overall, ALTEN SA demonstrates strong financial health with consistent revenue growth and robust cash flow, supported by a solid balance sheet with low leverage. However, the declining net profit margin and return on equity indicate potential efficiency issues that may need addressing to sustain long-term profitability.

Income Statement

ALTEN SA shows a consistent revenue growth with a 1.83% increase from 2023 to 2024, following a strong historical upward trend. The gross profit margin stands at 18.54% for 2024, indicating stable profitability. However, the net profit margin has decreased from 5.73% in 2023 to 4.50% in 2024, signaling declining cost efficiency. Both EBIT and EBITDA margins have shown minor fluctuations but remain healthy.

Balance Sheet

The company maintains a solid equity position with an equity ratio of 60.64% in 2024, reflecting financial stability. The debt-to-equity ratio is low at 0.17, indicating conservative leverage. However, the return on equity has decreased to 8.44% in 2024 from 11.45% in 2023, suggesting reduced profitability from shareholder investments.

Cash Flow

ALTEN SA's cash flow is robust, with a significant free cash flow growth rate of 88.76% from 2023 to 2024. The operating cash flow to net income ratio is strong at 2.31, showcasing efficient cash generation relative to earnings. Additionally, the free cash flow to net income ratio of 2.23 reinforces the company's ability to generate cash relative to its net earnings.

Breakdown
Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
4.14B	4.07B	3.78B	2.93B	2.33B
	Gross Profit
768.17M	714.42M	582.68M	451.55M	268.80M
	EBIT
277.02M	319.90M	391.64M	297.85M	134.64M
	EBITDA
450.74M	430.04M	682.25M	363.17M	203.93M
	Net Income Common Stockholders
186.42M	233.21M	457.57M	207.84M	98.01M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
288.10M	323.40M	601.74M	312.31M	283.42M
	Total Assets
3.64B	3.41B	3.37B	2.63B	2.15B
	Total Debt
370.88M	367.97M	422.20M	275.21M	258.06M
	Net Debt
82.79M	44.57M	-179.54M	-37.10M	-25.37M
	Total Liabilities
1.43B	1.37B	1.53B	1.21B	939.49M
	Stockholders Equity
2.21B	2.04B	1.84B	1.42B	1.21B
Cash Flow		Free Cash Flow
415.60M	220.19M	210.27M	212.09M	294.16M
	Operating Cash Flow
430.40M	241.12M	236.39M	228.68M	306.46M
	Investing Cash Flow
-326.06M	-320.25M	58.17M	-117.62M	-127.10M
	Financing Cash Flow
-141.40M	-192.66M	-4.48M	-88.82M	-92.33M

ALTEN SA Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 74.45
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For FR:ATE, the sentiment is Negative. The current price of 74.45 is below the 20-day moving average (MA) of 75.58, below the 50-day MA of 84.72, and below the 200-day MA of 86.64, indicating a bearish trend. The MACD of -2.34 indicates Negative momentum. The RSI at 42.05 is Neutral, neither overbought nor oversold. The STOCH value of 55.32 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for FR:ATE.

ALTEN SA Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
ATE	68 Neutral	€2.59B	14.08	8.78%	2.00%	1.83%	-22.29%
Sector *	64 Neutral	$4.44B	11.99	5.16%	249.23%	4.01%	-11.87%

ALTEN SA Corporate Events

ALTEN SA Reports 2024 Results and Anticipates Challenges Ahead

ALTEN SA reported a slight organic decline in its 2024 annual results, with an operating margin of 9.1% of revenue. Despite a 1.8% growth in activity, driven by a significant increase in France, the company faced challenges in the UK, Germany, and Northern European markets, impacting its financial performance. The company achieved substantial free cash flow growth and made strategic acquisitions in Asia and Europe, strengthening its market position. However, ALTEN anticipates continued challenges in 2025, particularly in European markets, with expectations for potential activity decline in early 2025. The company remains hopeful for growth in the latter half of the year, contingent on macroeconomic improvements.