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Sapiens International (SPNS)
NASDAQ:SPNS
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Sapiens
(NASDAQ:SPNS)
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Rating:71Outperform
Price Target:
$47.00
▲(9.25% Upside)
Sapiens' strong financial performance and strategic acquisitions are key strengths, supporting future growth. However, technical indicators suggest caution due to overbought conditions, and the high P/E ratio indicates potential overvaluation. The earnings call provided a balanced view, with strategic moves offsetting some operational challenges.
Positive Factors
Recurring Revenue Growth
The increase in recurring revenue enhances revenue predictability and stability, supporting long-term financial health and strategic growth.
Strategic Acquisitions
These acquisitions expand Sapiens' market presence and product offerings, strengthening its competitive position and growth potential.
Improvement in Gross Margin
Improved gross margin indicates better cost management and operational efficiency, enhancing profitability and financial resilience.
Negative Factors
Currency Impact on Revenue
Currency fluctuations can adversely affect revenue, posing a risk to financial performance and complicating international operations.
Decline in European Revenue
A decline in European revenue suggests regional challenges, potentially impacting overall growth and necessitating strategic adjustments.
Loss-Making Acquisitions
Loss-making acquisitions could strain profitability, requiring effective integration and management to realize long-term strategic benefits.
Sapiens (SPNS) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$2.40B
Dividend Yield1.37%
Average Volume (3M)1.66M
Price to Earnings (P/E)35.3
Beta (1Y)1.12
Revenue Growth3.08%
EPS Growth-1.02%
CountryUS
Employees4,850
SectorTechnology
Sector Strength88
IndustrySoftware - Application
Share Statistics
EPS (TTM)0.34
Shares Outstanding55,900,640
10 Day Avg. Volume814,777
30 Day Avg. Volume1,660,651
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)N/A
P/FCF RatioN/A
Enterprise Value/Market Cap0.68
Enterprise Value/Revenue2.99
Enterprise Value/Gross Profit6.69
Enterprise Value/Ebitda15.35
Forecast
1Y Price Target
$47.00Price Target Upside9.25% Upside
Rating ConsensusHold
Number of Analyst Covering2
Sapiens Business Overview & Revenue Model
Company DescriptionSapiens International Corporation N.V. provides software solutions for the insurance and financial services industries in North America, the European Union, the United Kingdom, Israel, and internationally. The company offers Sapiens CoreSuite and Sapiens IDITSuite for personal, commercial, and specialty lines; and Sapiens CoreSuite, Sapiens UnderwritingPro, Sapiens ApplicationPro, Sapiens IllustrationPro, and Sapiens ConsolidationMaster for life, pension, and annuities. It also provides Sapiens DigitalSuite for customers, agents, brokers, risk managers, customer groups and third-party service providers; Sapiens ReinsuranceMaster and Sapiens ReinsurancePro reinsurance solutions; and Sapiens Platform, Sapiens CoreSuite, Sapiens PolicyPro, and Sapiens ClaimsPro, as well as Sapiens PolicyGo, and Sapiens ClaimsGo for workers' compensation. In addition, the company offers financial and compliance solutions, which comprise Sapiens FinancialPro, Sapiens Financial GO, Sapiens StatementPro, Sapiens CheckPro, and Sapiens Reporting Tools; and Sapiens Decision, an enterprise-scale platform that enables institutions to centrally author, store, and manage various organizational business logics. Further, it provides tailor-made solutions based on its Sapiens eMerge platform; and program delivery, business, and managed services. The company markets and sells its products and services through direct and partner sales. Sapiens International Corporation N.V. was founded in 1982 and is headquartered in Holon, Israel.
How the Company Makes MoneySapiens generates revenue primarily through software licensing, maintenance contracts, and professional services. The company offers its software solutions on a subscription basis, where clients pay for the use of the software over time, creating a recurring revenue stream. In addition to licensing, Sapiens earns income from maintenance and support services, ensuring that clients receive ongoing updates and assistance. Professional services, including implementation, customization, and consulting, contribute significantly to the revenue model, as these services often accompany software sales. Furthermore, Sapiens has established strategic partnerships with key players in the insurance industry, enhancing its market presence and facilitating access to new clients, which further drives its earnings.
Sapiens Earnings Call Summary
Earnings Call Date:Aug 13, 2025
(Q1-2025)
| % Change Since: |
Next Earnings Date:Nov 06, 2025
Earnings Call Sentiment Neutral
The earnings call reflects a generally positive outlook, with strong revenue growth, strategic acquisitions, and robust performance in North America and APAC. However, challenges such as currency impacts, a decrease in European revenue, and short-term profit impacts from acquisitions balance the narrative.Q1-2025 Updates
Positive Updates
Strategic Acquisitions
Sapiens International Corporation announced the acquisition of Candela and Advantage Go, enhancing capabilities in the Life platform and expanding the global P&C proposition. These acquisitions are expected to contribute to significant growth, especially in APAC and the London specialty market.
Revenue Growth
First quarter 2025 revenue increased by 1.4% to $136 million compared to $134 million in Q1 2024. On a constant currency basis, revenue would have been $2 million higher.
Increase in Annualized Recurring Revenue
Annualized recurring revenue (ARR) for Q1 2025 totaled $187 million, reflecting an 11.8% increase from Q1 2024, driven by new logos signed in the previous quarter.
North America and APAC Growth
Revenue in North America increased by 3.1% and in the Rest of the World, including APAC, by 13.4% compared to last year, demonstrating robust growth in these regions.
Strong Life and Annuity Business
Life and Annuity businesses showed multiple wins and go-lives, with new deals signed in North America and Europe, indicating a strong demand for life system transformation.
Negative Updates
Negative Currency Impact
The first quarter of 2025 saw a negative currency impact compared to Q1 2024, which affected revenue figures. On a constant currency basis, revenue would have been $2 million higher.
Decrease in European Revenue
Revenue in Europe decreased by 1.8% compared to last year. On a constant currency basis, revenue in Europe would have been 0.6% higher.
Implementation Revenue Decline
Revenue from implementation decreased to $28 million compared to $40 million in Q1 2024, reflecting the completion of several go-live projects and extended timelines for existing projects.
Profit Impact from Acquisitions
While the acquisitions of Candela and Advantage Go are strategically valuable, they are expected to have a short-term negative impact on profitability, with Advantage Go remaining loss-making throughout the year.
Company Guidance
During Sapiens International Corporation's first quarter 2025 earnings call, the company provided updated guidance and highlighted key metrics and strategic initiatives. Sapiens reported Q1 2025 revenue of $136 million, a 1.4% increase over Q1 2024, with annualized recurring revenue (ARR) rising 11.8% to $187 million. The company raised its 2025 non-GAAP revenue guidance to $574-$578 million, indicating 6% growth at the midpoint, and revised its operating profit target to $94-$96 million. Sapiens announced strategic acquisitions of Candela and Advantage Go, expected to add $21 million in revenue and enhance growth in key markets such as North America, EMEA, and APAC. The company continues to focus on cloud adoption, with a target penetration rate of over 60% within five years, and aims for mid-to-high single-digit revenue growth in 2026. Despite a temporary dip in profitability due to acquisitions, Sapiens anticipates robust long-term growth and profitability improvements.Sapiens Financial Statement Overview
Summary
Sapiens exhibits strong financial performance with consistent revenue growth, high profitability margins, and stable cash flows. The balance sheet shows effective debt management and robust equity, supporting long-term growth and sustainability. Continuous monitoring of leverage and cash flow trends will be crucial to maintain its financial health.Income Statement
Sapiens demonstrated strong income statement metrics with a consistent revenue growth trajectory, highlighted by a TTM revenue of $544.2M, up from $542.4M in 2024. The company's gross profit margin stands at 44.6%, with a net profit margin of 13.4% in TTM, indicating solid profitability. EBIT and EBITDA margins of 15.9% and 19.4% respectively, further underscore operational efficiency. The revenue growth rate from 2023 to 2024 was 5.4%, showcasing a steady upward trend.85
Very Positive
Balance Sheet
The balance sheet reflects a strong equity position with a stockholders' equity of $460.6M and an equity ratio of 64.5% in TTM, indicating financial stability. The debt-to-equity ratio has improved to 0.09 in TTM, down from 0.13 in 2024, showcasing effective leverage management. Additionally, return on equity (ROE) remains robust at 15.8%, suggesting efficient use of equity capital.78
Positive
Cash Flow
Sapiens has demonstrated healthy cash flow metrics, with a TTM free cash flow of $78.8M and a free cash flow to net income ratio of 1.08, indicating strong cash generation relative to earnings. The operating cash flow to net income ratio is 1.22, reflecting efficient cash operations. The free cash flow growth rate from 2023 to 2024 was 13.1%, suggesting a positive trend in cash flow generation.72
Positive
| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 544.24M | 542.38M | 514.58M | 474.74M | 461.04M | 382.90M |
| Gross Profit | 242.78M | 238.11M | 219.59M | 200.16M | 187.84M | 155.97M |
| EBITDA | 105.81M | 105.92M | 94.86M | 83.52M | 84.12M | 63.62M |
| Net Income | 72.75M | 72.18M | 62.44M | 52.59M | 47.17M | 33.77M |
Balance Sheet | ||||||
| Total Assets | 713.98M | 691.71M | 689.62M | 666.75M | 714.99M | 714.16M |
| Cash, Cash Equivalents and Short-Term Investments | 205.86M | 216.19M | 202.12M | 180.28M | 210.24M | 182.56M |
| Total Debt | 43.20M | 63.75M | 87.05M | 116.57M | 148.36M | 177.17M |
| Total Liabilities | 239.64M | 212.08M | 239.68M | 265.49M | 306.27M | 330.47M |
| Stockholders Equity | 460.59M | 479.63M | 447.27M | 400.50M | 406.55M | 381.69M |
Cash Flow | ||||||
| Free Cash Flow | 78.77M | 79.35M | 70.16M | 34.73M | 68.69M | 47.01M |
| Operating Cash Flow | 88.87M | 82.22M | 79.42M | 43.78M | 80.54M | 58.26M |
| Investing Cash Flow | -9.85M | 13.41M | -72.78M | -12.44M | 125.00K | -114.60M |
| Financing Cash Flow | -53.18M | -56.28M | -43.34M | -58.38M | -39.96M | 156.51M |
Sapiens Technical Analysis
Positive
43.02
Price Trends
36.36
Positive
32.54
Positive
29.49
Positive
Market Momentum
1.70
Positive
82.79
Negative
38.73
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SPNS, the sentiment is Positive. The current price of 43.02 is above the 20-day moving average (MA) of 42.94, above the 50-day MA of 36.36, and above the 200-day MA of 29.49, indicating a bullish trend. The MACD of 1.70 indicates Positive momentum. The RSI at 82.79 is Negative, neither overbought nor oversold. The STOCH value of 38.73 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for SPNS.
Sapiens Risk Analysis
Sapiens disclosed 39 risk factors in its most recent earnings report. Sapiens reported the most risks in the "Tech & Innovation" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Sapiens Peers Comparison
Overall Rating
UnderperformOutperform
Sector (61)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
71 Outperform | $2.40B | 35.33 | 14.27% | 1.37% | 3.08% | -1.02% | |
63 Neutral | 1.48B | -67.40 | -5.73% | ― | 5.96% | 50.29% | |
62 Neutral | 838.10M | -15.01 | -37.20% | ― | 14.79% | 27.52% | |
60 Neutral | 1.09B | -813.33 | -0.46% | ― | 22.16% | -107.92% | |
60 Neutral | 1.60B | -16.10 | -34.47% | ― | 9.93% | -11.15% | |
61 Neutral | $37.18B | 12.37 | -10.20% | 1.83% | 8.50% | -7.62% |
* Technology Sector Average
Performance Comparison
SPNS
Sapiens
43.02
7.77
22.04%
CALX
Calix
62.86
23.55
59.91%
PAR
Par Technology
42.32
-13.51
-24.20%
PRGS
Progress Software
41.96
-15.19
-26.58%
ALIT
Alight
3.34
-3.72
-52.69%
ALKT
Alkami Technology
25.29
-5.51
-17.89%
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.