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1. Company Snapshot

1.a. 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.

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1.b. Last Insights on TXT

TXT e-solutions S.p.A.'s recent performance was negatively impacted by the company's failure to meet expectations despite a 36% revenue increase in Q4 2024, driven by strong organic growth and strategic focus on high-growth sectors. The company's inability to sustain momentum in the current quarter, amidst mixed corporate earnings and AI competition fears, has raised concerns about its ability to maintain growth. Additionally, the company's recent earnings release did not provide any significant updates on its business performance, leaving investors with limited visibility into its future prospects.

1.c. Company Highlights

2. Transcript Summary

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3. NewsRoom

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4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (11.15%)

6. Segments

Software Engineering

Expected Growth: 12%

TXT e-solutions S.p.A.'s Software Engineering segment growth of 12% is driven by increasing demand for digital transformation, adoption of cloud-based solutions, and growing need for customized software development. Additionally, the company's expertise in emerging technologies such as AI, IoT, and blockchain, and its strong presence in key industries like finance and healthcare, contribute to its growth momentum.

Smart Solutions

Expected Growth: 10%

TXT e-solutions' Smart Solutions segment growth is driven by increasing demand for digital transformation, adoption of Industry 4.0 technologies, and growing need for supply chain optimization. Additionally, the company's strong presence in the fashion and retail industries, coupled with its innovative product offerings, contribute to its 10% growth rate.

Digital Advisory

Expected Growth: 9%

TXT e-solutions' Digital Advisory segment growth is driven by increasing demand for digital transformation, adoption of cloud-based services, and need for data-driven decision making. The company's expertise in AI, IoT, and analytics, combined with its strong partnerships and expanding presence in key markets, contribute to its 9% growth rate.

7. Detailed Products

TXTPerform

A business performance management solution that enables organizations to monitor and analyze their performance in real-time.

TXTDrive

A digital transformation platform that enables companies to create, deploy, and manage digital solutions, such as mobile apps and web applications.

TXTRetail

A retail management solution that provides a comprehensive platform for managing retail operations, including inventory, supply chain, and customer relationships.

TXTSupplyChain

A supply chain management solution that enables companies to optimize their logistics, transportation, and inventory management processes.

TXTAnalytics

A business analytics platform that provides advanced data analytics and machine learning capabilities to support data-driven decision-making.

8. TXT e-solutions S.p.A.'s Porter Forces

Forces Ranking

Threat Of Substitutes

TXT e-solutions S.p.A. operates in a niche market, providing specialized IT services to the financial industry. While there are some substitutes available, they are not as specialized as TXT's offerings, reducing the threat of substitutes.

Bargaining Power Of Customers

TXT e-solutions S.p.A.'s customers are primarily large financial institutions, which have limited bargaining power due to their dependence on TXT's specialized services.

Bargaining Power Of Suppliers

TXT e-solutions S.p.A. relies on a few key suppliers for its technology and infrastructure needs. While these suppliers have some bargaining power, TXT's strong relationships and contracts mitigate this risk.

Threat Of New Entrants

The IT services market for the financial industry has high barriers to entry, including significant capital requirements and specialized expertise. This reduces the threat of new entrants.

Intensity Of Rivalry

The IT services market for the financial industry is highly competitive, with several established players competing for market share. TXT e-solutions S.p.A. must continually innovate and differentiate its services to maintain its market position.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 48.70%
Debt Cost 3.95%
Equity Weight 51.30%
Equity Cost 8.29%
WACC 6.17%
Leverage 94.94%

11. Quality Control: TXT e-solutions S.p.A. passed 3 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
Mensch und Maschine Software

A-Score: 5.5/10

Value: 2.5

Growth: 7.0

Quality: 7.7

Yield: 6.2

Momentum: 2.0

Volatility: 7.3

1-Year Total Return ->

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Stock-Card
Shoper

A-Score: 5.3/10

Value: 0.9

Growth: 9.4

Quality: 8.1

Yield: 1.9

Momentum: 7.5

Volatility: 4.0

1-Year Total Return ->

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Stock-Card
TXT

A-Score: 4.8/10

Value: 3.7

Growth: 9.1

Quality: 3.9

Yield: 1.2

Momentum: 6.5

Volatility: 4.3

1-Year Total Return ->

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Sapiens

A-Score: 4.5/10

Value: 1.3

Growth: 6.2

Quality: 7.6

Yield: 3.8

Momentum: 7.0

Volatility: 1.0

1-Year Total Return ->

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Stock-Card
cBrain

A-Score: 3.6/10

Value: 0.0

Growth: 8.7

Quality: 7.7

Yield: 0.6

Momentum: 3.5

Volatility: 1.0

1-Year Total Return ->

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NCC Group

A-Score: 3.4/10

Value: 4.5

Growth: 2.0

Quality: 2.6

Yield: 4.4

Momentum: 2.5

Volatility: 4.3

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

30.4$

Current Price

30.4$

Potential

-0.00%

Expected Cash-Flows