TELUS INTERNATIONAL CDA INC (TIXT.CA) Stock Fundamental Analysis
TSX:TIXT - Toronto Stock Exchange - CA87975H1001 - Common Stock - Currency: CAD
We assign a fundamental rating of 4 out of 10 to TIXT. TIXT was compared to 15 industry peers in the IT Services industry. There are concerns on the financial health of TIXT while its profitability can be described as average. A decent growth rate in combination with a cheap valuation! Better keep an eye on TIXT.
1. Profitability
1.1 Basic Checks
TIXT had positive earnings in the past year.
In the past year TIXT had a positive cash flow from operations.
Of the past 5 years TIXT 4 years were profitable.
In the past 5 years TIXT always reported a positive cash flow from operatings.
1.2 Ratios
The Return On Assets of TIXT (-1.35%) is better than 64.29% of its industry peers.
TIXT's Return On Equity of -3.14% is fine compared to the rest of the industry. TIXT outperforms 71.43% of its industry peers.
TIXT has a Return On Invested Capital of 1.85%. This is in the better half of the industry: TIXT outperforms 71.43% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for TIXT is in line with the industry average of 5.91%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | -1.35% | ||
| ROE | -3.14% | ||
| ROIC | 1.85% |
ROA(3y)1.64%
ROA(5y)1.96%
ROE(3y)3.16%
ROE(5y)4.69%
ROIC(3y)4.57%
ROIC(5y)4.61%
1.3 Margins
The Operating Margin of TIXT (3.65%) is better than 78.57% of its industry peers.
In the last couple of years the Operating Margin of TIXT has declined.
TIXT has a Gross Margin of 81.04%. This is amongst the best in the industry. TIXT outperforms 85.71% of its industry peers.
TIXT's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 3.65% | ||
| PM (TTM) | N/A | ||
| GM | 81.04% |
OM growth 3Y-27.26%
OM growth 5Y-20.91%
PM growth 3YN/A
PM growth 5YN/A
GM growth 3Y0.3%
GM growth 5Y-0.39%
2. Health
2.1 Basic Checks
TIXT has a Return on Invested Capital (ROIC), which is below the Cost of Capital (WACC), which means it is destroying value.
The number of shares outstanding for TIXT has been increased compared to 1 year ago.
The number of shares outstanding for TIXT has been increased compared to 5 years ago.
Compared to 1 year ago, TIXT has an improved debt to assets ratio.
2.2 Solvency
TIXT has an Altman-Z score of 0.94. This is a bad value and indicates that TIXT is not financially healthy and even has some risk of bankruptcy.
TIXT has a better Altman-Z score (0.94) than 64.29% of its industry peers.
TIXT has a debt to FCF ratio of 3.70. This is a good value and a sign of high solvency as TIXT would need 3.70 years to pay back of all of its debts.
TIXT's Debt to FCF ratio of 3.70 is fine compared to the rest of the industry. TIXT outperforms 64.29% of its industry peers.
TIXT has a Debt/Equity ratio of 0.72. This is a neutral value indicating TIXT is somewhat dependend on debt financing.
TIXT's Debt to Equity ratio of 0.72 is in line compared to the rest of the industry. TIXT outperforms 57.14% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.72 | ||
| Debt/FCF | 3.7 | ||
| Altman-Z | 0.94 |
ROIC/WACC0.24
WACC7.68%
2.3 Liquidity
TIXT has a Current Ratio of 0.95. This is a bad value and indicates that TIXT is not financially healthy enough and could expect problems in meeting its short term obligations.
Looking at the Current ratio, with a value of 0.95, TIXT is in line with its industry, outperforming 42.86% of the companies in the same industry.
TIXT has a Quick Ratio of 0.95. This is a bad value and indicates that TIXT is not financially healthy enough and could expect problems in meeting its short term obligations.
TIXT has a Quick ratio (0.95) which is comparable to the rest of the industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.95 | ||
| Quick Ratio | 0.95 |
3. Growth
3.1 Past
TIXT shows a strong negative growth in Earnings Per Share. In the last year the EPS decreased by -57.61%.
TIXT shows a very negative growth in Earnings Per Share. Measured over the last years, the EPS has been decreasing by -27.18% yearly.
The Revenue has decreased by -1.85% in the past year.
Measured over the past years, TIXT shows a very strong growth in Revenue. The Revenue has been growing by 21.12% on average per year.
EPS 1Y (TTM)-57.61%
EPS 3Y-27.18%
EPS 5YN/A
EPS Q2Q%-115.38%
Revenue 1Y (TTM)-1.85%
Revenue growth 3Y6.6%
Revenue growth 5Y21.12%
Sales Q2Q%-0.14%
3.2 Future
Based on estimates for the next years, TIXT will show a quite strong growth in Earnings Per Share. The EPS will grow by 14.24% on average per year.
The Revenue is expected to grow by 13.57% on average over the next years. This is quite good.
EPS Next Y-14.32%
EPS Next 2Y6.18%
EPS Next 3Y14.24%
EPS Next 5YN/A
Revenue Next Year2.23%
Revenue Next 2Y3.04%
Revenue Next 3Y4.04%
Revenue Next 5Y13.57%
3.3 Evolution
The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
Although the future Revenue growth is still strong, it is not able to hold up the even more excellent growth rate of the past years.
4. Valuation
4.1 Price/Earnings Ratio
TIXT is valuated cheaply with a Price/Earnings ratio of 7.61.
Based on the Price/Earnings ratio, TIXT is valued cheaper than 92.86% of the companies in the same industry.
TIXT is valuated cheaply when we compare the Price/Earnings ratio to 29.01, which is the current average of the S&P500 Index.
TIXT is valuated reasonably with a Price/Forward Earnings ratio of 8.88.
Compared to the rest of the industry, the Price/Forward Earnings ratio of TIXT indicates a rather cheap valuation: TIXT is cheaper than 92.86% of the companies listed in the same industry.
TIXT's Price/Forward Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 22.40.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 7.61 | ||
| Fwd PE | 8.88 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of TIXT indicates a rather cheap valuation: TIXT is cheaper than 92.86% of the companies listed in the same industry.
100.00% of the companies in the same industry are more expensive than TIXT, based on the Price/Free Cash Flow ratio.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 2.01 | ||
| EV/EBITDA | 5.26 |
4.3 Compensation for Growth
TIXT's earnings are expected to grow with 14.24% in the coming years. This may justify a more expensive valuation.
PEG (NY)N/A
PEG (5Y)N/A
EPS Next 2Y6.18%
EPS Next 3Y14.24%
5. Dividend
5.1 Amount
No dividends for TIXT!.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
TSX:TIXT (2/27/2025, 7:00:00 PM)
4.26
-0.18 (-4.05%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustryIT Services
Earnings (Last)
Earnings (Next)
Inst Owners49.39%
Inst Owner ChangeN/A
Ins Owners1.24%
Ins Owner ChangeN/A
Market Cap1.19B
Analysts48.24
Price Target10.14 (138.03%)
Short Float %N/A
Short RatioN/A
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
Yearly DividendN/A
Dividend Growth(5Y)N/A
DPN/A
Div Incr Years0
Div Non Decr Years0
Ex-DateN/A
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)96.04%
Min EPS beat(2)-96.96%
Max EPS beat(2)289.04%
EPS beat(4)2
Avg EPS beat(4)46.69%
Min EPS beat(4)-96.96%
Max EPS beat(4)289.04%
EPS beat(8)3
Avg EPS beat(8)23.01%
EPS beat(12)7
Avg EPS beat(12)16.69%
EPS beat(16)11
Avg EPS beat(16)15.36%
Revenue beat(2)1
Avg Revenue beat(2)0.23%
Min Revenue beat(2)-0.28%
Max Revenue beat(2)0.73%
Revenue beat(4)1
Avg Revenue beat(4)-2.7%
Min Revenue beat(4)-6.5%
Max Revenue beat(4)0.73%
Revenue beat(8)1
Avg Revenue beat(8)-3.11%
Revenue beat(12)1
Avg Revenue beat(12)-3.29%
Revenue beat(16)1
Avg Revenue beat(16)-2.87%
PT rev (1m)1.73%
PT rev (3m)1.73%
EPS NQ rev (1m)-21.92%
EPS NQ rev (3m)-70.72%
EPS NY rev (1m)-19.02%
EPS NY rev (3m)-37.9%
Revenue NQ rev (1m)-2.22%
Revenue NQ rev (3m)-6.88%
Revenue NY rev (1m)0.07%
Revenue NY rev (3m)-0.22%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 7.61 | ||
| Fwd PE | 8.88 | ||
| P/S | 0.31 | ||
| P/FCF | 2.01 | ||
| P/OCF | 1.6 | ||
| P/B | 0.43 | ||
| P/tB | N/A | ||
| EV/EBITDA | 5.26 |
EPS(TTM)0.56
EY13.15%
EPS(NY)0.48
Fwd EY11.26%
FCF(TTM)2.12
FCFY49.82%
OCF(TTM)2.66
OCFY62.52%
SpS13.69
BVpS10.02
TBVpS-7.01
PEG (NY)N/A
PEG (5Y)N/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | -1.35% | ||
| ROE | -3.14% | ||
| ROCE | 2.57% | ||
| ROIC | 1.85% | ||
| ROICexc | 1.94% | ||
| ROICexgc | 23.52% | ||
| OM | 3.65% | ||
| PM (TTM) | N/A | ||
| GM | 81.04% | ||
| FCFM | 15.5% |
ROA(3y)1.64%
ROA(5y)1.96%
ROE(3y)3.16%
ROE(5y)4.69%
ROIC(3y)4.57%
ROIC(5y)4.61%
ROICexc(3y)4.76%
ROICexc(5y)4.8%
ROICexgc(3y)33.38%
ROICexgc(5y)46.87%
ROCE(3y)6.35%
ROCE(5y)6.4%
ROICexcg growth 3Y-36.12%
ROICexcg growth 5Y-3.66%
ROICexc growth 3Y-29.52%
ROICexc growth 5Y-28.85%
OM growth 3Y-27.26%
OM growth 5Y-20.91%
PM growth 3YN/A
PM growth 5YN/A
GM growth 3Y0.3%
GM growth 5Y-0.39%
F-Score4
Asset Turnover0.59
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.72 | ||
| Debt/FCF | 3.7 | ||
| Debt/EBITDA | 3.35 | ||
| Cap/Depr | 32.41% | ||
| Cap/Sales | 3.95% | ||
| Interest Coverage | 1.05 | ||
| Cash Conversion | 122.8% | ||
| Profit Quality | N/A | ||
| Current Ratio | 0.95 | ||
| Quick Ratio | 0.95 | ||
| Altman-Z | 0.94 |
F-Score4
WACC7.68%
ROIC/WACC0.24
Cap/Depr(3y)33.52%
Cap/Depr(5y)34.32%
Cap/Sales(3y)3.83%
Cap/Sales(5y)3.95%
Profit Quality(3y)N/A
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)-57.61%
EPS 3Y-27.18%
EPS 5YN/A
EPS Q2Q%-115.38%
EPS Next Y-14.32%
EPS Next 2Y6.18%
EPS Next 3Y14.24%
EPS Next 5YN/A
Revenue 1Y (TTM)-1.85%
Revenue growth 3Y6.6%
Revenue growth 5Y21.12%
Sales Q2Q%-0.14%
Revenue Next Year2.23%
Revenue Next 2Y3.04%
Revenue Next 3Y4.04%
Revenue Next 5Y13.57%
EBIT growth 1Y-59.24%
EBIT growth 3Y-22.45%
EBIT growth 5Y-4.2%
EBIT Next Year446.62%
EBIT Next 3YN/A
EBIT Next 5Y72.45%
FCF growth 1Y0.73%
FCF growth 3Y24.79%
FCF growth 5Y35.89%
OCF growth 1Y3.82%
OCF growth 3Y18.46%
OCF growth 5Y29.56%