OTCPK:TMSN.Y

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.


Snowflake Analysis

Reasonable growth potential with acceptable 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: TMSN.Y has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

-0.5%

TMSN.Y

2.4%

US Software

1.7%

US Market


1 Year Return

17.1%

TMSN.Y

39.0%

US Software

23.2%

US Market

Return vs Industry: TMSN.Y underperformed the US Software industry which returned 39.8% over the past year.

Return vs Market: TMSN.Y underperformed the US Market which returned 24.7% over the past year.


Shareholder returns

TMSN.YIndustryMarket
7 Day-0.5%2.4%1.7%
30 Day1.6%7.8%4.2%
90 Day8.8%19.4%11.9%
1 Year17.6%17.1%40.2%39.0%25.8%23.2%
3 Year122.5%119.4%144.0%134.3%52.8%42.9%
5 Yearn/a198.3%177.0%75.2%55.8%

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

No news available

Valuation

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

58.14x

Price to Earnings (PE) ratio


Share Price vs. Fair Value

Below Fair Value: TMSN.Y ($154.44) is trading above our estimate of fair value ($106.78)

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


Price To Earnings Ratio

PE vs Industry: TMSN.Y is poor value based on its PE Ratio (56.7x) compared to the Software industry average (47.3x).

PE vs Market: TMSN.Y is poor value based on its PE Ratio (56.7x) compared to the US market (18.9x).


Price to Earnings Growth Ratio

PEG Ratio: TMSN.Y is poor value based on its PEG Ratio (3.3x)


Price to Book Ratio

PB vs Industry: TMSN.Y is overvalued based on its PB Ratio (30.5x) compared to the US Software industry average (5.9x).


Next Steps

Future Growth

How is Temenos forecast to perform in the next 1 to 3 years based on estimates from 15 analysts?

17.3%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: TMSN.Y's forecast earnings growth (17.3% per year) is above the savings rate (1.7%).

Earnings vs Market: TMSN.Y's earnings (17.3% per year) are forecast to grow faster than the US market (14.3% per year).

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

Revenue vs Market: TMSN.Y's revenue (13.2% per year) is forecast to grow faster than the US market (7.5% per year).

High Growth Revenue: TMSN.Y's revenue (13.2% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: TMSN.Y's Return on Equity is forecast to be very high in 3 years time (46.8%).


Next Steps

Past Performance

How has Temenos performed over the past 5 years?

20.6%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: TMSN.Y has high quality earnings.

Growing Profit Margin: TMSN.Y's current net profit margins (20.6%) are higher than last year (19.3%).


Past Earnings Growth Analysis

Earnings Trend: TMSN.Y's earnings have grown significantly by 20.6% per year over the past 5 years.

Accelerating Growth: TMSN.Y's earnings growth over the past year (20%) is below its 5-year average (20.6% per year).

Earnings vs Industry: TMSN.Y earnings growth over the past year (20%) underperformed the Software industry 20.8%.


Return on Equity

High ROE: Whilst TMSN.Y's Return on Equity (53.58%) 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: TMSN.Y's short term assets ($438.5M) do not cover its short term liabilities ($508.8M).

Long Term Liabilities: TMSN.Y's short term assets ($438.5M) do not cover its long term liabilities ($1.3B).


Debt to Equity History and Analysis

Debt Level: TMSN.Y's debt to equity ratio (329.3%) is considered high.

Reducing Debt: TMSN.Y's debt to equity ratio has increased from 85.9% to 329.3% over the past 5 years.

Debt Coverage: TMSN.Y's debt is well covered by operating cash flow (31%).

Interest Coverage: TMSN.Y's interest payments on its debt are well covered by EBIT (18.4x coverage).


Balance Sheet

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

Debt Coverage by Assets: TMSN.Y's debt is not covered by short term assets (assets are 0.4x debt).


Next Steps

Dividend

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

0.46%

Current Dividend Yield


Dividend Yield vs Market

company0.5%marketbottom25%1.4%markettop25%3.6%industryaverage1.3%forecastin3Years0.7%

Current dividend yield vs market & industry

Notable Dividend: TMSN.Y's dividend (0.48%) isn’t notable compared to the bottom 25% of dividend payers in the US market (1.4%).

High Dividend: TMSN.Y's dividend (0.48%) is low compared to the top 25% of dividend payers in the US market (3.66%).


Stability and Growth of Payments

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

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


Current Payout to Shareholders

Dividend Coverage: TMSN.Y is not paying a notable dividend for the US market.


Future Payout to Shareholders

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


Next Steps

Management

What is the CEO of Temenos's salary, the management and board of directors tenure and is there insider trading?

0.9yrs

Average management tenure


CEO

Max Chuard (46yo)

0.8yrs

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 ...


Management Age and Tenure

0.9yrs

Average Tenure

54yo

Average Age

Experienced Management: TMSN.Y's management team is not considered experienced ( 0.9 years average tenure), which suggests a new team.


Board Age and Tenure

7.1yrs

Average Tenure

67.5yo

Average Age

Experienced Board: TMSN.Y's board of directors are considered experienced (7.1 years average tenure).


Insider Trading

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.


Management Team

  • Tom Hogan (60yo)

    President of North America & Member of the Executive Committee

    • Tenure: 1yrs
  • André Loustau (61yo)

    CTO & Member of the Executive Committee

    • Andreas Andreades (54yo)

      Executive Chairman

      • Tenure: 7.5yrs
      • Compensation: US$6.33m
    • Jean-Michel Hilsenkopf (56yo)

      COO & Member of the Executive Committee

      • Tenure: 0.9yrs
    • Max Chuard (46yo)

      CEO & Member of the Executive Committee

      • Tenure: 0.8yrs
    • Takis Spiliopoulos (49yo)

      CFO & Member of the Executive Committee

      • Tenure: 0.8yrs
    • Alexa Guenoun (47yo)

      Chief Client Officer & Member of the Executive Committee

      • Tenure: 0.9yrs
    • Mark Winterburn (59yo)

      Chief Product Officer & Member of the Executive Committee

      • Deirdre Dempsey (48yo)

        General Counsel

        • Tenure: 12yrs
      • Adam Snyder

        Head of Investor Relations


        Board Members

        • Sergio Giacoletto-Roggio (70yo)

          Independent Vice-Chairman

          • Tenure: 5.7yrs
          • Compensation: US$154.72k
        • Thibault de Tersant (62yo)

          Independent & Non-Executive Director

          • Tenure: 7.6yrs
          • Compensation: US$157.62k
        • George Koukis (73yo)

          Non-Executive Director

          • Tenure: 19yrs
          • Compensation: US$112.71k
        • Andreas Andreades (54yo)

          Executive Chairman

          • Tenure: 7.5yrs
          • Compensation: US$6.33m
        • Erik Hansen (67yo)

          Independent & Non-Executive Director

          • Tenure: 6.7yrs
          • Compensation: US$114.16k
        • Amy Yip (68yo)

          Independent & Non-Executive Director

          • Tenure: 5.7yrs
          • Compensation: US$111.67k
        • Ian Cookson (72yo)

          Independent & Non-Executive Director

          • Tenure: 7.6yrs
          • Compensation: US$111.67k
        • Peter Spenser (65yo)

          Independent & Non-Executive Director

          • Tenure: 2.7yrs
          • Compensation: US$105.00k

        Company Information

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


        Key Information

        • Name: Temenos AG
        • Ticker: TMSN.Y
        • Exchange: OTCPK
        • Founded: 1993
        • Industry: Application Software
        • Sector: Software
        • Market Cap: CHF10.785b
        • Listing Market Cap: CHF11.178b
        • 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)SPON ADR EA REPR 1 ORDUSUSDNov 2011
        TE8ADB (Deutsche Boerse AG)SPON ADR EA REPR 1 ORDDEEURNov 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 Analysis2020/01/17 02:09
        End of Day Share Price2020/01/16 00:00
        Earnings2019/09/30
        Annual Earnings2018/12/31


        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.