Thomson Reuters (TRI) AI Stock Analysis

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Positive Factors

Capital Allocation

Management is targeting returning 75% of free cash flow to shareholders annually, 50% via the dividend and 25% via buybacks.

Financial Performance

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

Segment Growth

Tax Professionals segment showed strong organic growth with a 16% increase in adjusted EBITDA, easily surpassing estimates.

Negative Factors

Revenue Decline

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

Revenue Expectations

The revenue guide for 2025 was slightly below consensus expectations.

User Adoption

Checks continue to find still-limited user adoption of CoCounsel due to a perception of low quality output.

Thomson Reuters (TRI) vs. SPDR S&P 500 ETF (SPY)

Market Cap

$87.93B

Dividend Yield1.16%

Average Volume (3M)582.39K

Price to Earnings (P/E)40.6

Beta (1Y)0.60

Revenue GrowthN/A

EPS GrowthN/A

CountryUS

Employees26,400

SectorIndustrials

Sector Strength91

IndustrySpecialty Business Services

Share Statistics

EPS (TTM)1.12

Shares Outstanding450,478,420

10 Day Avg. Volume519,892

30 Day Avg. Volume582,387

Financial Highlights & Ratios

PEG Ratio-18.41

Price to Book (P/B)6.86

Price to Sales (P/S)0.00

P/FCF Ratio45.45

Enterprise Value/Market Cap0.98

Enterprise Value/Revenue2.99

Enterprise Value/Gross Profit18.38

Enterprise Value/Ebitda7.43

Forecast

1Y Price Target

$186.47

Price Target Upside-4.37% Downside

Rating ConsensusHold

Number of Analyst Covering10

Thomson Reuters Business Overview & Revenue Model

Company DescriptionThomson Reuters Corporation provides business information services in the Americas, Europe, the Middle East, Africa, and the Asia Pacific. It operates in five segments: Legal Professionals, Corporates, Tax & Accounting Professionals, Reuters News, and Global Print. The Legal Professionals segment offers research and workflow products focusing on legal research and integrated legal workflow solutions that combine content, tools, and analytics to law firms and governments. The Corporates segment provides a suite of content-enabled technology solutions for legal, tax, regulatory, compliance, and IT professionals. The Tax & Accounting Professionals segment offers research and workflow products focusing on tax offerings and automating tax workflows to tax, accounting, and audit professionals in accounting firms. The Reuters News segment provides business, financial, and international news to media organizations, professional, and news consumers through news agency and industry events. The Global Print segment offers legal and tax information primarily in print format to legal and tax professionals, governments, law schools, and corporations. The company was formerly known as The Thomson Corporation and changed its name to Thomson Reuters Corporation in April 2008. The company was founded in 1851 and is headquartered in Toronto, Canada. Thomson Reuters Corporation is a subsidiary of The Woodbridge Company Limited.

How the Company Makes Money

Thomson Reuters Earnings Call Summary

Earnings Call Date:May 01, 2025

(Q1-2025)

% Change Since: 5.19%|

Next Earnings Date:Jul 31, 2025

Earnings Call Sentiment Positive

The earnings call presented a positive outlook with strong revenue growth and reaffirmed guidance. Notable achievements include successful product launches, a strategic acquisition, and a dividend increase, although there were challenges such as declines in Reuters News and Global Print revenues. Overall, the highlights outweigh the lowlights.

Q1-2025 Updates

Positive Updates

Strong Start to Fiscal Year 2025

2025 began positively with revenue at the high end of the outlook and profits exceeding expectations. Total company organic revenues rose 6%, with the Big Three segments growing by 9%.

Reaffirmed Full-Year 2025 Outlook

The company reaffirmed its full-year 2025 outlook, expecting organic growth in the range of 7% to 7.5%, including approximately 9% for the Big Three segments and margins to rise by 75 basis points year-over-year to approximately 39%.

Successful Product Launches and Acquisitions

The first quarter saw the launch of CoCounsel Tax, Audit and Accounting, an AI-powered assistant, and the acquisition of SafeSend for $600 million, which is off to a strong start with a smooth integration.

Dividend Increase

The company raised its 2025 annual dividend by 10% for the fourth consecutive year to $2.38 per share.

Tax & Accounting Segment Strength

The Tax & Accounting segment showed strong performance with organic revenue growth of 11%, driven by Latin American business and tax compliance offerings.

Negative Updates

Decline in Reuters News Revenue

Reuters News organic revenues declined 7% due to a difficult comparison from significant transactional generative AI licensing revenue in the prior year period.

Global Print Revenue Decline

Global Print organic revenues declined 5% year-over-year, in line with expectations.

Adjusted EBITDA Margin Decline

Adjusted EBITDA was essentially unchanged year-over-year at $809 million, reflecting a 40 basis point margin decline to 42.3%.

Company Guidance

During the Thomson Reuters First Quarter 2025 earnings call, CEO Steve Hasker reported that the company started the year positively, with total organic revenues rising by 6% and the Big Three segments experiencing 9% growth. The company reaffirmed its full-year 2025 outlook, anticipating organic growth between 7% and 7.5%, with a 75 basis point increase in margins to approximately 39%. Key contributors to this growth included double-digit expansion in products such as CoCounsel, SurePrep, Pagero, Indirect Tax, and international businesses. Adjusted EBITDA for the quarter was $809 million, reflecting a 40 basis point margin decline to 42.3%. Segment-wise, Legal Professionals saw 8% organic revenue growth, Corporates 9%, and Tax & Accounting 11%, while Reuters News faced a 7% decline. The company also highlighted a strong capital position with $10 billion of capacity through 2027 and a commitment to a balanced capital allocation approach.

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

Very Positive

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

Positive

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

Very Positive

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.

TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
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
	EBIT
2.12B	2.11B	2.33B	1.83B	1.24B	1.93B
	EBITDA
3.02B	3.05B	2.95B	3.01B	2.02B	2.76B
	Net Income Common Stockholders
2.16B	2.21B	2.69B	1.89B	-553.00M	1.69B
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
1.41B	1.89B	1.36B	1.27B	886.00M	2.40B
	Total Assets
18.48B	18.44B	18.68B	21.71B	22.15B	17.88B
	Total Debt
2.81B	3.08B	3.54B	4.76B	3.79B	3.77B
	Net Debt
1.44B	1.22B	2.34B	3.69B	3.01B	1.99B
	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 Peers Comparison

Overall Rating

UnderperformOutperform

Sector (66)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
TRI		$87.93B	40.63	18.46%	1.16%	―	―
Sector *	66 Neutral	$4.51B	12.29	5.40%	248.53%	4.14%	-12.41%
RBA		$19.50B	51.61	7.74%	1.09%	―	―
TCL.B	77 Outperform	C$1.76B	9.84	9.65%	4.28%	-2.58%	100.21%
TCL.A	76 Outperform	C$1.76B	9.88	9.65%	4.26%	-2.58%	100.21%

* Industrials Sector Average

Performance Comparison

TRI

Thomson Reuters

195.00

26.52

15.74%

RBA

Ritchie Bros

105.13

26.96

34.49%

TSE:TCL.A

Transcontinental

21.11

7.69

57.30%

TSE:TCL.B

Transcontinental Inc. Class B

21.02

7.63

56.98%

Glossary

OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.

NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.

UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

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.