Temenos AG Fundamental Analysis (SIX: TEMN.SW)
Temenos AG (SIX: TEMN.SW) shows moderate financial fundamentals with a PE ratio of 33.05, profit margin of 17.50%, and ROE of 45.47%. The company generates $1.1B in annual revenue with moderate year-over-year growth of 9.45%.
Key Strengths
Areas of Concern
The stock receives a Fundamental Health Score of 56.2/100 based on profitability, valuation, growth, and balance sheet metrics. The C grade reflects average fundamentals, with notable risks in certain areas.
Fundamental Health Score
We analyze TEMN.SW's fundamental strength across five key dimensions:
Efficiency Score
WeakTEMN.SW struggles to generate sufficient returns from assets.
Valuation Score
ModerateTEMN.SW shows balanced valuation metrics.
Growth Score
ExcellentTEMN.SW delivers strong and consistent growth momentum.
Financial Health Score
WeakTEMN.SW carries high financial risk with limited liquidity.
Profitability Score
ExcellentTEMN.SW achieves industry-leading margins.
Key Financial Metrics
Is TEMN.SW Expensive or Cheap?
P/E Ratio
TEMN.SW trades at 33.05 times earnings. This suggests a premium valuation.
PEG Ratio
When adjusting for growth, TEMN.SW's PEG of -0.80 indicates potential undervaluation.
Price to Book
The market values Temenos AG at 16.81 times its book value. This suggests the stock is fully valued or overvalued on an asset basis.
EV/EBITDA
Enterprise value stands at 10.65 times EBITDA. This signals the market has high growth expectations.
How Well Does TEMN.SW Make Money?
Net Profit Margin
For every $100 in sales, Temenos AG keeps $17.50 as profit after all expenses.
Operating Margin
Core operations generate 49.11 in profit for every $100 in revenue, before interest and taxes.
ROE
Management delivers $45.47 in profit for every $100 of shareholder equity.
ROA
Temenos AG generates $8.76 in profit for every $100 in assets, demonstrating efficient asset deployment.
Following the Money - Real Cash Generation
Operating Cash Flow
Temenos AG generates strong operating cash flow of $537.97M, reflecting robust business health.
Free Cash Flow
Temenos AG generates strong free cash flow of $498.96M, providing ample flexibility for dividends, buybacks, or growth.
FCF Per Share
Each share generates $7.41 in free cash annually.
FCF Yield
TEMN.SW converts 7.78% of its market value into free cash.
Financial Ratios Analysis
Valuation Ratios
P/E Ratio
Price to earnings ratio
33.05
vs 25 benchmark
PEG Ratio
Price/earnings to growth ratio
-0.80
vs 25 benchmark
P/B Ratio
Price to book value ratio
16.81
vs 25 benchmark
P/S Ratio
Price to sales ratio
5.74
vs 25 benchmark
Financial Health
Debt/Equity
Total debt to shareholders' equity
2.26
vs 25 benchmark
Current Ratio
Current assets to current liabilities
0.51
vs 25 benchmark
Efficiency Ratios
ROE
Return on equity percentage
0.45
vs 25 benchmark
ROA
Return on assets percentage
0.09
vs 25 benchmark
ROCE
Return on capital employed
0.41
vs 25 benchmark
How TEMN.SW Stacks Against Its Sector Peers
| Metric | TEMN.SW Value | Sector Average | Performance |
|---|---|---|---|
| P/E Ratio | 33.05 | 35.20 | Neutral |
| ROE | 45.47% | 749.00% | Weak |
| Net Margin | 17.50% | -2812.00% (disorted) | Strong |
| Debt/Equity | 2.26 | 0.59 | Weak (High Leverage) |
| Current Ratio | 0.51 | 6.19 | Weak Liquidity |
| ROA | 8.76% | 328.00% | Weak |
TEMN.SW outperforms its industry in 1 out of 6 key metrics, particularly excelling in Net Margin, but lagging in ROE.
Historical Growth Performance
5-Year Growth Trajectory
This section reviews Temenos AG's 5-year compound annual growth rate (CAGR) and compares its performance against the typical investment style of its industry.
Revenue CAGR
34.22%
Industry Style: Growth, Innovation, High Beta
High GrowthEPS CAGR
75.05%
Industry Style: Growth, Innovation, High Beta
High GrowthFCF CAGR
-3.57%
Industry Style: Growth, Innovation, High Beta
Declining