TXT e solutions SPA (TXT) AI Stock Analysis

• Market Cap: €421.11M
• Dividend Yield: 0.73%
• Average Volume (3M): 29.05K
• Price to Earnings (P/E): 25.0
• Beta (1Y): 0.59
• Revenue Growth: 39.23%
• EPS Growth: 0.77%
• Country: IT
• Employees: 3,282
• Sector: Technology
• Sector Strength: 88
• Industry: Software - Application
• EPS (TTM): 0.39
• Shares Outstanding: 13,006,250
• 10 Day Avg. Volume: 39,818
• 30 Day Avg. Volume: 29,052
• 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: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: €47.40
• Price Target Upside: 30.94% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 1

• Rating: 68 Neutral
• Price Target: €37.00 ▲(2.21% Upside)

TXT e solutions SPA shows strong revenue growth and stable profitability, but faces challenges with declining gross margins and increased leverage. Technical indicators suggest positive momentum, though valuation metrics indicate the stock is fairly valued. The absence of earnings call data and corporate events limits additional insights.

Positive Factors

Revenue Growth

Consistent revenue growth indicates robust market demand and effective business strategies, supporting long-term expansion and competitiveness.

Market Position

Specialization in high-quality software and consulting services enhances TXT's market position, catering to diverse industries and driving sustained demand.

Partnerships

Strategic partnerships expand TXT's market reach and product offerings, fostering innovation and competitive advantage in the software industry.

Negative Factors

Gross Profit Margin Decline

A declining gross profit margin may indicate rising costs or pricing pressures, potentially impacting long-term profitability and cost management.

Increased Leverage

Increased leverage can strain financial flexibility and increase risk, affecting the company's ability to invest in growth opportunities.

Weakening Cash Flow

Decreased cash flow generation limits financial flexibility, affecting the company's ability to fund operations and strategic initiatives.

TXT e solutions SPA Business Overview & Revenue Model

Company Description

TXT e-solutions S.p.A., together with its subsidiaries, provides software and service solutions in Italy and internationally. It operates in two segments: Aerospace, Aviation & Transportation; and Fintech. The Aerospace, Aviation & Transportation segment offers on-board software, flight simulators, training systems, flight support systems, and manufacturing solutions; and specialized engineering services to aerospace companies and airline operators. Its customers comprise manufacturers of aircraft and engines, airlines, and civil and defense operators, as well as maintenance, repair, and overhaul companies. The Fintech segment provides solutions for the nonperforming loans, digital payments, factoring, compliance, and supply chain finance market; financial applications for banks and financial companies; solutions for risk management; technological and consulting services; and information and communications technology services to the bank sector. The company was formerly known as TXT Ingegneria Informatica S.p.A. and changed its name to TXT e-solutions S.p.A. in March 2000. TXT e-solutions S.p.A. was founded in 1989 and is headquartered in Cologno Monzese, Italy.

How the Company Makes Money

TXT e-solutions generates revenue primarily through the sale of software licenses, subscription fees for cloud-based services, and consulting services. Key revenue streams include software solutions tailored for specific industries, which are often sold as a one-time license or as a subscription service. Additionally, the company earns money by providing consulting and support services to help clients implement and optimize their solutions. Significant partnerships with major players in the technology and manufacturing sectors also contribute to its earnings, as they enhance its product offerings and market reach.

TXT e solutions SPA Financial Statement Overview

Summary

TXT e solutions SPA presents a robust financial profile with strong revenue growth and profitability, efficient capital management, and a stable balance sheet. The company is well-positioned within the Software - Application industry, benefiting from operational efficiencies and strategic financial management. While the financials indicate a positive trajectory, careful attention to debt levels and capital investments will be crucial to sustaining long-term growth and stability.

Income Statement

TXT e solutions SPA shows strong revenue growth with a significant increase from 2024 to TTM, indicating robust demand for its services. The company maintains healthy gross and net profit margins, which are indicative of effective cost management and profitability. EBIT and EBITDA margins further support the company's operational efficiency. However, the outstanding performance in Gross Profit Margin in earlier years has normalized to industry levels, which could be a point for further improvement.

Balance Sheet

The balance sheet of TXT e solutions SPA indicates a stable financial position with a manageable debt-to-equity ratio, suggesting a balanced approach to leveraging. Return on Equity is solid, reflecting the company's effective use of shareholders' funds to generate profits. The equity ratio is decent, showing a fair amount of the company’s assets are financed by equity, which provides a cushion against liabilities. The company's increasing assets and equity over the years are positive, though the rise in total liabilities warrants monitoring.

Cash Flow

The cash flow analysis reveals positive free cash flow growth, supporting the company's ability to invest and return value to shareholders. The operating cash flow to net income ratio is healthy, indicating good cash conversion. The company has consistently managed to generate free cash flow, showcasing effective capital expenditure management. However, fluctuations in investing cash flow suggest variable capital investments which should be monitored for long-term sustainability.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	355.45M	304.54M	224.39M	150.76M	96.36M	68.75M
Gross Profit	87.47M	76.28M	35.20M	109.32M	75.60M	55.19M
EBITDA	48.71M	38.27M	35.80M	24.60M	15.31M	9.74M
Net Income	17.99M	15.90M	15.51M	11.99M	7.87M	4.47M
Balance Sheet
Total Assets	492.48M	448.38M	302.24M	300.78M	226.06M	173.45M
Cash, Cash Equivalents and Short-Term Investments	85.91M	75.53M	61.99M	81.50M	84.37M	80.09M
Total Debt	201.84M	183.03M	108.80M	114.53M	87.95M	52.42M
Total Liabilities	332.21M	296.55M	188.37M	191.40M	132.99M	87.58M
Stockholders Equity	157.25M	149.76M	113.85M	109.37M	92.65M	85.45M
Cash Flow
Free Cash Flow	13.62M	16.66M	8.03M	16.37M	7.07M	-2.31M
Operating Cash Flow	24.18M	26.76M	22.19M	18.16M	8.53M	-1.16M
Investing Cash Flow	-46.70M	-49.02M	11.09M	-32.48M	-10.27M	7.14M
Financing Cash Flow	55.01M	42.64M	-28.77M	11.01M	25.88M	-5.46M

TXT e solutions SPA Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 36.20
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Negative
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For IT:TXT, the sentiment is Positive. The current price of 36.2 is above the 20-day moving average (MA) of 31.98, above the 50-day MA of 31.51, and above the 200-day MA of 34.17, indicating a bullish trend. The MACD of 1.01 indicates Negative momentum. The RSI at 76.01 is Negative, neither overbought nor oversold. The STOCH value of 93.28 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for IT:TXT.

TXT e solutions SPA Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
DGV	81 Outperform	€323.78M	17.18	―	2.56%	-24.28%	-57.55%
TXT	68 Neutral	€421.11M	24.98	13.06%	0.73%	39.23%	0.77%
WIIT	66 Neutral	€532.19M	52.98	31.22%	1.50%	20.75%	-9.34%
IOT	62 Neutral	€454.11M	―	-5.53%	―	-3.47%	-947.32%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
TNXT	60 Neutral	€680.12M	169.76	1.04%	2.02%	17.21%	-80.93%