Thales SA Unsponsored ADR (THLLY) AI Stock Analysis

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Thales SA Unsponsored ADR

(Other OTC:THLLY)

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Rating:69Neutral

Price Target:$56.00▲(9.52% Upside)

Action:downgraded

Date:10/24/26

The score is primarily supported by strong cash generation and improving multi-year profitability, reinforced by a constructive earnings call with upgraded 2026 book-to-bill and cash conversion guidance. Offsetting this are the sharp 2025 revenue drop (raising sustainability questions), a still-meaningful leverage profile, and a weaker technical backdrop (negative MACD and price below key moving averages). Valuation also weighs on the score due to a high P/E with only a modest dividend yield.

Positive Factors

Order momentumStrong order intake and book-to-bill above one indicate that new business is exceeding recognized sales, supporting backlog growth and future revenue visibility. This is particularly durable for Thales because its defense and aerospace programs typically convert through multi-year contracts and services.

Negative Factors

Revenue volatilityThe sharp latest-period revenue decline raises questions about the durability and quality of reported growth, even though net income increased. For a contract-driven company, uneven program deliveries can make capacity planning and forecasting harder and may weaken confidence in near-term revenue continuity.

Thales SA Unsponsored ADR (THLLY) vs. SPDR S&P 500 ETF (SPY)

Market Cap: $52.63B
Dividend Yield: 1.79%
Average Volume (3M): 65.78K
Price to Earnings (P/E): 31.6
Beta (1Y): 0.33
Revenue Growth: 14.68%
EPS Growth: 133.82%
Country: US
Employees: 84,958
Sector: General
Sector Strength: 55
Industry: Aerospace & Defense

Thales SA Unsponsored ADR Business Overview & Revenue Model

Company Description

Thales S.A. stands as a global technology leader, delivering a wide array of advanced solutions to both civilian and military clients across critical sectors. These encompass aeronautics, space exploration, defense, overall security, ground transport...

How the Company Makes Money

Thales makes money primarily by selling complex, mission-critical hardware, integrated systems, software, and long-term services to government and commercial customers across its main segments. A large share of revenue is generated from defense and s...

Thales SA Unsponsored ADR Earnings Call Summary

Earnings Call Date:Jul 23, 2026(Q2-2026)|% Change Since:-1.21%|Next Earnings Date:Mar 09, 2027

Earnings Call SentimentPositive

The call presented a broadly positive operational and financial picture driven by very strong order intake (+22% organic), robust sales growth (7.8% organic; ~9.6% ex‑satellite cancellation), margin expansion (adjusted EBIT +10% and 12.5% margin), exceptional free cash flow (~EUR 1.8–1.9bn) and a major reduction in net debt (~EUR 3bn year‑on‑year). Defence and Aerospace were key drivers with strong bookings and improved profitability. Offsetting factors include one‑off satellite cancellations, weaker performance and margin pressure in parts of Cyber & Digital (Payments and Identity), and normal H2 seasonality and timing risks for cash flow and large defence/space awards. Overall the positives materially outweigh the negatives, but watch the Digital margin recovery and H2 cash/capex phasing.

Positive Updates

Strong Order Intake and Book-to-Bill

Order intake reached EUR 12.5bn in H1 2026, up 22% organically year‑on‑year; book-to-bill remained above 1 at 1.14 and guidance for 2026 book-to-bill was upgraded to above 1.1.

Negative Updates

Satellite Contract Cancellations Impact

Cancellation of 2 geostationary telco satellites reduced H1 sales by approximately EUR 153m and lowered reported Space revenue growth; management cites reuse of delivered work but it is a one‑off negative impact on H1 sales.

Company Guidance

Thales upgraded two 2026 guidance items and confirmed others: book‑to‑bill is now expected above 1.1 and the conversion of adjusted net income into free operating cash flow has been raised to 100–110%; the group confirms 2026 organic sales growth of 6–7% (implying sales of EUR 23.3–23.6bn) and an adjusted EBIT margin target of 12.6–12.8%; CapEx guidance is roughly EUR 850m and an additional French corporate tax of about EUR 100m is expected in 2026; management also expects Defence adjusted EBIT margin to stay above 13.5% and aims for Space profitability around 7% by 2027.

Thales SA Unsponsored ADR Financial Statement Overview

Summary

Profitability improved over 2020–2024 (higher gross and net margins) and free cash flow is a clear strength (FCF ~2.0B in 2024 rising to ~2.53B in 2025). However, the sharp 2025 revenue decline (about -40% growth rate) adds uncertainty, and leverage remains meaningful despite improvement (debt down to ~6.1B with equity ~8.0B in 2025).

Income Statement

72Positive

Balance Sheet

64Positive

Cash Flow

78Positive

Financial statement breakdown
Breakdown	TTM	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	22.95B	21.26B	20.58B	18.43B	17.57B	16.19B
Gross Profit	6.17B	5.62B	5.37B	4.77B	4.46B	4.03B
EBITDA	3.53B	3.18B	2.67B	2.46B	2.50B	2.28B
Net Income	1.50B	1.61B	1.42B	1.02B	1.12B	1.09B
Balance Sheet
Total Assets	39.99B	39.14B	39.99B	38.79B	34.42B	32.84B
Cash, Cash Equivalents and Short-Term Investments	5.05B	4.49B	4.77B	4.08B	5.30B	5.05B
Total Debt	5.57B	6.13B	7.82B	8.43B	5.47B	6.13B
Total Liabilities	31.98B	31.15B	32.43B	31.82B	27.04B	26.12B
Stockholders Equity	8.00B	7.97B	7.52B	6.83B	7.17B	6.48B
Cash Flow
Free Cash Flow	4.02B	2.53B	2.01B	970.80M	2.56B	2.26B
Operating Cash Flow	4.76B	3.19B	2.64B	1.60B	3.06B	2.71B
Investing Cash Flow	-856.94M	-873.89M	-62.80M	-4.23B	-1.17B	-493.40M
Financing Cash Flow	-2.84B	-2.55B	-2.00B	1.59B	-1.75B	-2.17B

Thales SA Unsponsored ADR Technical Analysis

Technical Analysis SentimentNegative

Last Price51.13

Price Trends

50DMA52.00Negative

100DMA53.89Negative

200DMA55.30Negative

Market Momentum

MACD-0.23Negative

RSI47.63Neutral

STOCH55.53Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For THLLY, the sentiment is Negative. The current price of 51.13 is below the 20-day moving average (MA) of 51.63, below the 50-day MA of 52.00, and below the 200-day MA of 55.30, indicating a bearish trend. The MACD of -0.23 indicates Negative momentum. The RSI at 47.63 is Neutral, neither overbought nor oversold. The STOCH value of 55.53 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for THLLY.

Thales SA Unsponsored ADR Peers Comparison

Overall Rating

UnderperformOutperform

Sector (55)

Financial Indicators

THLLY against its peers
Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
GD	80Outperform	$99.29B	21.30	17.60%	1.71%	9.73%	10.46%
LMT	79Outperform	$139.32B	21.58	78.85%	2.26%	7.86%	57.22%
NOC	77Outperform	$77.94B	17.35	25.70%	1.74%	6.51%	14.02%
LHX	75Outperform	$51.38B	25.66	10.17%	1.79%	7.33%	15.31%
RTX	71Outperform	$270.25B	32.31	12.77%	1.40%	11.63%	26.50%
THLLY	69Neutral	$53.07B	31.65	18.73%	1.79%	14.68%	133.82%
Sector *	55Neutral	$6.65B	3.83	-15.92%	6.20%	10.91%	7.18%

* General Sector Average

Performance Comparison

THLLY and its peers over the selected period
Ticker	Company Name	Price	Change	% Change
THLLY	Thales SA Unsponsored ADR	51.13	-3.88	-7.05%
GD	General Dynamics	367.22	29.09	8.60%
LHX	L3harris Technologies	276.59	-8.08	-2.84%
LMT	Lockheed Martin	610.05	156.01	34.36%
NOC	Northrop Grumman Corp.	550.96	1.91	0.35%
RTX	Rtx Corporation	201.29	28.29	16.35%

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.

Date of analysis: Oct 23, 2026

Thales SA Unsponsored ADR AI Stock Analysis