SWX:TEMN

Stock Analysis Report

Executive Summary

Temenos AG, together with its subsidiaries, develops, markets, and sells integrated banking software systems primarily to banking and other financial institutions worldwide.

Rewards

Earnings are forecast to grow 17.46% per year

Earnings have grown 20.7% per year over the past 5 years

Risk Analysis

Has a high level of debt



Snowflake Analysis

Reasonable growth potential with questionable track record.


Similar Companies

Share Price & News

How has Temenos's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: TEMN has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

1.4%

TEMN

1.1%

CH Software

0.2%

CH Market


1 Year Return

16.5%

TEMN

30.1%

CH Software

17.6%

CH Market

Return vs Industry: TEMN underperformed the Swiss Software industry which returned 29.8% over the past year.

Return vs Market: TEMN underperformed the Swiss Market which returned 17.7% over the past year.


Shareholder returns

TEMNIndustryMarket
7 Day1.4%1.1%0.2%
30 Day6.4%1.0%2.2%
90 Day11.4%7.8%7.0%
1 Year17.0%16.5%32.8%30.1%23.2%17.6%
3 Year116.4%113.2%57.0%48.0%40.0%22.9%
5 Year420.6%402.6%128.4%109.4%45.8%22.7%

Price Volatility Vs. Market

How volatile is Temenos's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Temenos undervalued compared to its fair value and its price relative to the market?

65.11x

Price to Earnings (PE) ratio


Share Price vs. Fair Value

Below Fair Value: TEMN (CHF164.1) is trading above our estimate of fair value (CHF144.77)

Significantly Below Fair Value: TEMN is trading above our estimate of fair value.


Price To Earnings Ratio

PE vs Industry: TEMN is poor value based on its PE Ratio (65.1x) compared to the Software industry average (33.1x).

PE vs Market: TEMN is poor value based on its PE Ratio (65.1x) compared to the Swiss market (21.2x).


Price to Earnings Growth Ratio

PEG Ratio: TEMN is poor value based on its PEG Ratio (3.7x)


Price to Book Ratio

PB vs Industry: TEMN is overvalued based on its PB Ratio (26.6x) compared to the XE Software industry average (3.4x).


Next Steps

Future Growth

How is Temenos forecast to perform in the next 1 to 3 years based on estimates from 16 analysts?

17.5%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: TEMN's forecast earnings growth (17.5% per year) is above the savings rate (-0.6%).

Earnings vs Market: TEMN's earnings (17.5% per year) are forecast to grow faster than the Swiss market (10.6% per year).

High Growth Earnings: TEMN's earnings are forecast to grow, but not significantly.

Revenue vs Market: TEMN's revenue (12.1% per year) is forecast to grow faster than the Swiss market (3.3% per year).

High Growth Revenue: TEMN's revenue (12.1% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: TEMN's Return on Equity is forecast to be high in 3 years time (35.4%)


Next Steps

Past Performance

How has Temenos performed over the past 5 years?

20.7%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: TEMN has high quality earnings.

Growing Profit Margin: TEMN's current net profit margins (18.6%) are lower than last year (20%).


Past Earnings Growth Analysis

Earnings Trend: TEMN's earnings have grown significantly by 20.7% per year over the past 5 years.

Accelerating Growth: TEMN's earnings growth over the past year (7.7%) is below its 5-year average (20.7% per year).

Earnings vs Industry: TEMN earnings growth over the past year (7.7%) underperformed the Software industry 8.1%.


Return on Equity

High ROE: Whilst TEMN's Return on Equity (40.69%) is outstanding, this metric is skewed due to their high level of debt.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Temenos's financial position?


Financial Position Analysis

Short Term Liabilities: TEMN's short term assets ($541.4M) do not cover its short term liabilities ($674.2M).

Long Term Liabilities: TEMN's short term assets ($541.4M) do not cover its long term liabilities ($1.2B).


Debt to Equity History and Analysis

Debt Level: TEMN's debt to equity ratio (253%) is considered high.

Reducing Debt: TEMN's debt to equity ratio has increased from 85.3% to 253% over the past 5 years.

Debt Coverage: TEMN's debt is well covered by operating cash flow (30.8%).

Interest Coverage: TEMN's interest payments on its debt are well covered by EBIT (10.6x coverage).


Balance Sheet

Inventory Level: TEMN has a low level of unsold assets or inventory.

Debt Coverage by Assets: TEMN's debt is not covered by short term assets (assets are 0.5x debt).


Next Steps

Dividend

What is Temenos's current dividend yield, its reliability and sustainability?

0.52%

Current Dividend Yield


Upcoming Dividend Payment

Purchase Temenos before the 'Buy Limit' to receive their next dividend payment.


Dividend Yield vs Market

company0.5%marketbottom25%1.7%markettop25%3.4%industryaverage1.2%forecastin3Years0.7%

Current dividend yield vs market & industry

Notable Dividend: TEMN's dividend (0.52%) isn’t notable compared to the bottom 25% of dividend payers in the Swiss market (1.72%).

High Dividend: TEMN's dividend (0.52%) is low compared to the top 25% of dividend payers in the Swiss market (3.35%).


Stability and Growth of Payments

Stable Dividend: TEMN is not paying a notable dividend for the Swiss market, therefore no need to check if payments are stable.

Growing Dividend: TEMN is not paying a notable dividend for the Swiss market, therefore no need to check if payments are increasing.


Current Payout to Shareholders

Dividend Coverage: TEMN is not paying a notable dividend for the Swiss market.


Future Payout to Shareholders

Future Dividend Coverage: No need to calculate the sustainability of TEMN's dividend in 3 years as they are not forecast to pay a notable one for the Swiss market.


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

1.0yrs

Average management tenure


CEO

Max Chuard (46yo)

0.9yrs

Tenure

0

Mr. Max Chuard has been Chief Executive Officer of Temenos AG since March 1, 2019 and serves as its Member of the Executive Committee. Mr. Chuard was the Chief Financial Officer of Temenos Group AG from Ju ...


Leadership Team

NamePositionTenureCompensationOwnership
Andreas Andreades
Executive Chairman7.6yrsUS$6.33mno data
Max Chuard
CEO & Member of the Executive Committee0.9yrsno datano data
Panagiotis Spiliopoulos
CFO & Member of the Executive Committee0.9yrsno datano data
André Loustau
CTO & Member of the Executive Committee0yrsno datano data
Jean-Michel Hilsenkopf
COO & Member of the Executive Committee1yrsno datano data
Mark Winterburn
Chief Product Officer & Member of the Executive Committee0yrsno datano data
Alexa Guenoun
Chief Client Officer & Member of the Executive Committee1yrsno datano data
Thomas Hogan
President of North America & Member of the Executive Committee1.1yrsno datano data
Adam Snyder
Head of Investor Relations0yrsno datano data
Deirdre Dempsey
General Counsel12.1yrsno datano data

1.0yrs

Average Tenure

54yo

Average Age

Experienced Management: TEMN's management team is not considered experienced ( 1 years average tenure), which suggests a new team.


Board Members

NamePositionTenureCompensationOwnership
Andreas Andreades
Executive Chairman7.6yrsUS$6.33mno data
Sergio Giacoletto-Roggio
Independent Vice-Chairman5.8yrsUS$154.72k0.013% $1.5m
Thibault de Tersant
Independent & Non-Executive Director7.7yrsUS$157.62k0.0042% $494.0k
George Koukis
Non-Executive Director19.1yrsUS$112.71k0.021% $2.5m
Erik Hansen
Independent & Non-Executive Director6.8yrsUS$114.16k0.015% $1.8m
Yok Tak Yip
Independent & Non-Executive Director5.8yrsUS$111.67kno data
Ian Cookson
Independent & Non-Executive Director7.7yrsUS$111.67k0.022% $2.6m
Peter Spenser
Independent & Non-Executive Director2.8yrsUS$105.00kno data

7.2yrs

Average Tenure

67.5yo

Average Age

Experienced Board: TEMN's board of directors are considered experienced (7.2 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Top Shareholders

Company Information

Temenos AG's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Temenos AG
  • Ticker: TEMN
  • Exchange: SWX
  • Founded: 1993
  • Industry: Application Software
  • Sector: Software
  • Market Cap: CHF11.679b
  • Shares outstanding: 70.95m
  • Website: https://www.temenos.com

Number of Employees


Location

  • Temenos AG
  • 2 Rue de L’Ecole-de-Chimie
  • Geneva
  • Geneva
  • 1205
  • Switzerland

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
TEMNSWX (SIX Swiss Exchange)YesCommon SharesCHCHFJun 2001
TMNS.FOTCPK (Pink Sheets LLC)YesCommon SharesUSUSDJun 2001
TE8NDB (Deutsche Boerse AG)YesCommon SharesDEEURJun 2001
0QOALSE (London Stock Exchange)YesCommon SharesGBCHFJun 2001
TMSN.YOTCPK (Pink Sheets LLC)SPONSORED ADRUSUSDNov 2011
TE8ADB (Deutsche Boerse AG)SPONSORED ADRDEEURNov 2011

Biography

Temenos AG, together with its subsidiaries, develops, markets, and sells integrated banking software systems primarily to banking and other financial institutions worldwide. The company provides Temenos T24 Transact, a core banking solution, which offers banking software, data and analytics, and risk and compliance solutions; and Temenos Payments, a payment solution that gives banks real-time control, customer service experience, and cost efficiencies and risk management solutions. It also offers Temenos Infinity, a digital banking product; Temenos WealthSuite, which empowers a wealth manager’s business; fund administration solutions; SaaS solution that supports banks in different sectors and geographies; Islamic banking solutions; and banking software for community financial institutions. In addition, the company provides business intelligence, private wealth management, mobile and Internet banking, and other software applications; consultancy services; support services. The company was formerly known as Temenos Group AG and changed its name to Temenos AG in May 2018. Temenos AG was founded in 1993 and is headquartered in Geneva, Switzerland. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/02/19 21:05
End of Day Share Price2020/02/19 00:00
Earnings2019/12/31
Annual Earnings2019/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.