TELUS INTERNATIONAL CDA INC (TIXT.CA) Stock Fundamental Analysis
TSX:TIXT - Toronto Stock Exchange - CA87975H1001 - Common Stock - Currency: CAD
TIXT gets a fundamental rating of 4 out of 10. The analysis compared the fundamentals against 13 industry peers in the IT Services industry. There are concerns on the financial health of TIXT while its profitability can be described as average. TIXT has a decent growth rate and is not valued too expensively.
1. Profitability
1.1 Basic Checks
TIXT had positive earnings in the past year.
TIXT had a positive operating cash flow in the past year.
TIXT had positive earnings in 4 of the past 5 years.
Each year in the past 5 years TIXT had a positive operating cash flow.
1.2 Ratios
TIXT has a Return On Assets of -2.53%. This is in the better half of the industry: TIXT outperforms 61.54% of its industry peers.
TIXT's Return On Equity of -5.84% is fine compared to the rest of the industry. TIXT outperforms 69.23% of its industry peers.
The Return On Invested Capital of TIXT (1.19%) is better than 69.23% of its industry peers.
TIXT had an Average Return On Invested Capital over the past 3 years of 4.57%. This is significantly below the industry average of 45.49%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | -2.53% | ||
| ROE | -5.84% | ||
| ROIC | 1.19% |
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 (2.28%) is better than 69.23% of its industry peers.
TIXT's Operating Margin has declined in the last couple of years.
Looking at the Gross Margin, with a value of 80.64%, TIXT belongs to the top of the industry, outperforming 84.62% of the companies in the same industry.
TIXT's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 2.28% | ||
| PM (TTM) | N/A | ||
| GM | 80.64% |
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
The Return on Invested Capital (ROIC) is below the Cost of Capital (WACC), so TIXT is destroying value.
The number of shares outstanding for TIXT has been increased compared to 1 year ago.
Compared to 5 years ago, TIXT has more shares outstanding
Compared to 1 year ago, TIXT has an improved debt to assets ratio.
2.2 Solvency
TIXT has a debt to FCF ratio of 4.26. This is a neutral value as TIXT would need 4.26 years to pay back of all of its debts.
Looking at the Debt to FCF ratio, with a value of 4.26, TIXT is in the better half of the industry, outperforming 69.23% of the companies in the same industry.
A Debt/Equity ratio of 0.70 indicates that TIXT is somewhat dependend on debt financing.
TIXT has a Debt to Equity ratio of 0.70. This is comparable to the rest of the industry: TIXT outperforms 53.85% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.7 | ||
| Debt/FCF | 4.26 | ||
| Altman-Z | N/A |
ROIC/WACC0.15
WACC7.86%
2.3 Liquidity
TIXT has a Current Ratio of 0.86. 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's Current ratio of 0.86 is on the low side compared to the rest of the industry. TIXT is outperformed by 61.54% of its industry peers.
TIXT has a Quick Ratio of 0.86. 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 worse Quick ratio (0.86) than 61.54% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.86 | ||
| Quick Ratio | 0.86 |
3. Growth
3.1 Past
The earnings per share for TIXT have decreased strongly by -72.09% in the last year.
Measured over the past years, TIXT shows a very negative growth in Earnings Per Share. The EPS has been decreasing by -26.56% on average per year.
TIXT shows a decrease in Revenue. In the last year, the revenue decreased by -0.30%.
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)-72.09%
EPS 3Y-26.56%
EPS 5YN/A
EPS Q2Q%-72.73%
Revenue 1Y (TTM)-0.3%
Revenue growth 3Y6.6%
Revenue growth 5Y21.12%
Sales Q2Q%1.98%
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 13.06% on average per year.
TIXT is expected to show quite a strong growth in Revenue. In the coming years, the Revenue will grow by 13.57% yearly.
EPS Next Y-18.55%
EPS Next 2Y4.79%
EPS Next 3Y13.06%
EPS Next 5YN/A
Revenue Next Year2.3%
Revenue Next 2Y2.95%
Revenue Next 3Y3.81%
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
With a Price/Earnings ratio of 15.00, TIXT is valued correctly.
Based on the Price/Earnings ratio, TIXT is valued cheaply inside the industry as 92.31% of the companies are valued more expensively.
Compared to an average S&P500 Price/Earnings ratio of 27.21, TIXT is valued a bit cheaper.
With a Price/Forward Earnings ratio of 8.24, the valuation of TIXT can be described as very reasonable.
100.00% of the companies in the same industry are more expensive than TIXT, based on the Price/Forward Earnings ratio.
When comparing the Price/Forward Earnings ratio of TIXT to the average of the S&P500 Index (21.70), we can say TIXT is valued rather cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 15 | ||
| Fwd PE | 8.24 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, TIXT is valued cheaply inside the industry as 92.31% of the companies are valued more expensively.
Based on the Price/Free Cash Flow ratio, TIXT is valued cheaply inside the industry as 100.00% of the companies are valued more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 2.86 | ||
| EV/EBITDA | 6.09 |
4.3 Compensation for Growth
TIXT's earnings are expected to grow with 13.06% in the coming years. This may justify a more expensive valuation.
PEG (NY)N/A
PEG (5Y)N/A
EPS Next 2Y4.79%
EPS Next 3Y13.06%
5. Dividend
5.1 Amount
TIXT does not give a dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
TSX:TIXT (6/30/2025, 7:00:00 PM)
4.95
+0.04 (+0.81%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustryIT Services
Earnings (Last)
Earnings (Next)
Inst Owners45.17%
Inst Owner ChangeN/A
Ins Owners1.59%
Ins Owner ChangeN/A
Market Cap1.37B
Analysts50
Price Target4.52 (-8.69%)
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)-17.78%
Min EPS beat(2)-47.72%
Max EPS beat(2)12.17%
EPS beat(4)2
Avg EPS beat(4)58.53%
Min EPS beat(4)-47.72%
Max EPS beat(4)289.04%
EPS beat(8)3
Avg EPS beat(8)30.43%
EPS beat(12)7
Avg EPS beat(12)21.57%
EPS beat(16)11
Avg EPS beat(16)18.39%
Revenue beat(2)2
Avg Revenue beat(2)0.84%
Min Revenue beat(2)0.72%
Max Revenue beat(2)0.97%
Revenue beat(4)2
Avg Revenue beat(4)-1.27%
Min Revenue beat(4)-6.5%
Max Revenue beat(4)0.97%
Revenue beat(8)2
Avg Revenue beat(8)-1.94%
Revenue beat(12)2
Avg Revenue beat(12)-3.09%
Revenue beat(16)2
Avg Revenue beat(16)-2.74%
PT rev (1m)-36.78%
PT rev (3m)-36.66%
EPS NQ rev (1m)0%
EPS NQ rev (3m)-12.26%
EPS NY rev (1m)0%
EPS NY rev (3m)-2.5%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)0.92%
Revenue NY rev (1m)0%
Revenue NY rev (3m)-0.11%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 15 | ||
| Fwd PE | 8.24 | ||
| P/S | 0.38 | ||
| P/FCF | 2.86 | ||
| P/OCF | 2.18 | ||
| P/B | 0.51 | ||
| P/tB | N/A | ||
| EV/EBITDA | 6.09 |
EPS(TTM)0.33
EY6.67%
EPS(NY)0.6
Fwd EY12.13%
FCF(TTM)1.73
FCFY34.92%
OCF(TTM)2.27
OCFY45.9%
SpS13.19
BVpS9.64
TBVpS-6.68
PEG (NY)N/A
PEG (5Y)N/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | -2.53% | ||
| ROE | -5.84% | ||
| ROCE | 1.65% | ||
| ROIC | 1.19% | ||
| ROICexc | 1.24% | ||
| ROICexgc | 17.43% | ||
| OM | 2.28% | ||
| PM (TTM) | N/A | ||
| GM | 80.64% | ||
| FCFM | 13.1% |
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 | 0.7 | ||
| Debt/FCF | 4.26 | ||
| Debt/EBITDA | 3.53 | ||
| Cap/Depr | 33.74% | ||
| Cap/Sales | 4.12% | ||
| Interest Coverage | 0.7 | ||
| Cash Conversion | 118.86% | ||
| Profit Quality | N/A | ||
| Current Ratio | 0.86 | ||
| Quick Ratio | 0.86 | ||
| Altman-Z | N/A |
F-Score4
WACC7.86%
ROIC/WACC0.15
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)-72.09%
EPS 3Y-26.56%
EPS 5YN/A
EPS Q2Q%-72.73%
EPS Next Y-18.55%
EPS Next 2Y4.79%
EPS Next 3Y13.06%
EPS Next 5YN/A
Revenue 1Y (TTM)-0.3%
Revenue growth 3Y6.6%
Revenue growth 5Y21.12%
Sales Q2Q%1.98%
Revenue Next Year2.3%
Revenue Next 2Y2.95%
Revenue Next 3Y3.81%
Revenue Next 5Y13.57%
EBIT growth 1Y-72.4%
EBIT growth 3Y-22.45%
EBIT growth 5Y-4.2%
EBIT Next Year378.91%
EBIT Next 3Y77.25%
EBIT Next 5Y72.45%
FCF growth 1Y18.64%
FCF growth 3Y24.79%
FCF growth 5Y35.89%
OCF growth 1Y17.05%
OCF growth 3Y18.46%
OCF growth 5Y29.56%