Telus International CDA Inc (TIXT.CA) Stock Fundamental Analysis

Canada • Toronto Stock Exchange • TSX:TIXT • CA87975H1001

6.07 CAD

+0.14 (+2.36%)

Last: Nov 3, 2025, 07:00 PM

Fundamental Rating

We assign a fundamental rating of 4 out of 10 to TIXT. TIXT was compared to 11 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 is not valued too expensively and it also shows a decent growth rate.

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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.
Each year in the past 5 years TIXT had a positive operating cash flow.

1.2 Ratios

The Return On Assets of TIXT (-8.63%) is comparable to the rest of the industry.
TIXT has a better Return On Equity (-22.61%) than 66.67% of its industry peers.
The Return On Invested Capital of TIXT (1.00%) is better than 66.67% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for TIXT is below the industry average of 9.15%.

		Industry Rank	Sector Rank
ROA	-8.63%
ROE	-22.61%
ROIC	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%

1.3 Margins

With a decent Operating Margin value of 1.80%, TIXT is doing good in the industry, outperforming 75.00% of the companies in the same industry.
In the last couple of years the Operating Margin of TIXT has declined.
TIXT has a better Gross Margin (80.28%) than 83.33% of its industry peers.
TIXT's Gross Margin has been stable in the last couple of years.

		Industry Rank	Sector Rank
OM	1.8%
PM (TTM)	N/A
GM	80.28%

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%

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ROA

ROE

ROIC

Operating and Profit Margin

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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.
TIXT has more shares outstanding than it did 5 years ago.
TIXT has a better debt/assets ratio than last year.

2.2 Solvency

TIXT has a debt to FCF ratio of 5.42. This is a neutral value as TIXT would need 5.42 years to pay back of all of its debts.
TIXT's Debt to FCF ratio of 5.42 is fine compared to the rest of the industry. TIXT outperforms 66.67% of its industry peers.
TIXT has a Debt/Equity ratio of 0.85. This is a neutral value indicating TIXT is somewhat dependend on debt financing.
TIXT's Debt to Equity ratio of 0.85 is in line compared to the rest of the industry. TIXT outperforms 50.00% of its industry peers.

		Industry Rank	Sector Rank
Debt/Equity	0.85
Debt/FCF	5.42
Altman-Z	N/A

ROIC/WACC0.13

WACC7.65%

2.3 Liquidity

A Current Ratio of 0.84 indicates that TIXT may have some problems paying its short term obligations.
With a Current ratio value of 0.84, TIXT is not doing good in the industry: 66.67% of the companies in the same industry are doing better.
A Quick Ratio of 0.84 indicates that TIXT may have some problems paying its short term obligations.
TIXT has a Quick ratio (0.84) which is comparable to the rest of the industry.

		Industry Rank	Sector Rank
Current Ratio	0.84
Quick Ratio	0.84

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WACC

Debt/Equity

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Altman-Z score

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3. Growth

3.1 Past

The earnings per share for TIXT have decreased strongly by -83.53% in the last year.
The earnings per share for TIXT have been decreasing by -26.56% on average. This is quite bad
TIXT shows a small growth in Revenue. In the last year, the Revenue has grown by 2.03%.
TIXT shows a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 21.12% yearly.

EPS 1Y (TTM)-83.53%

EPS 3Y-26.56%

EPS 5YN/A

EPS Q2Q%-62.5%

Revenue 1Y (TTM)2.03%

Revenue growth 3Y6.6%

Revenue growth 5Y21.12%

Sales Q2Q%7.21%

3.2 Future

The Earnings Per Share is expected to grow by 9.86% on average over the next years. This is quite good.
The Revenue is expected to grow by 13.57% on average over the next years. This is quite good.

EPS Next Y-23.07%

EPS Next 2Y-0.28%

EPS Next 3Y9.86%

EPS Next 5YN/A

Revenue Next Year4.01%

Revenue Next 2Y3.49%

Revenue Next 3Y3.8%

Revenue Next 5Y13.57%

3.3 Evolution

When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
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.

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4. Valuation

4.1 Price/Earnings Ratio

With a Price/Earnings ratio of 30.35, TIXT can be considered very expensive at the moment.
83.33% of the companies in the same industry are more expensive than TIXT, based on the Price/Earnings ratio.
Compared to an average S&P500 Price/Earnings ratio of 28.32, TIXT is valued at the same level.
A Price/Forward Earnings ratio of 10.88 indicates a reasonable valuation of TIXT.
91.67% of the companies in the same industry are more expensive than TIXT, based on the Price/Forward Earnings ratio.
Compared to an average S&P500 Price/Forward Earnings ratio of 25.57, TIXT is valued rather cheaply.

		Industry Rank	Sector Rank
PE	30.35
Fwd PE	10.88

4.2 Price Multiples

100.00% of the companies in the same industry are more expensive than TIXT, based on the Enterprise Value to EBITDA ratio.
100.00% of the companies in the same industry are more expensive than TIXT, based on the Price/Free Cash Flow ratio.