TELUS INTERNATIONAL CDA INC (TIXT) Stock Fundamental Analysis
NYSE:TIXT - New York Stock Exchange, Inc. - CA87975H1001 - Common Stock - Currency: USD
Taking everything into account, TIXT scores 4 out of 10 in our fundamental rating. TIXT was compared to 82 industry peers in the IT Services industry. While TIXT is still in line with the averages on profitability rating, there are concerns on its financial health. TIXT scores decently on growth, while it is valued quite cheap. This could make an interesting combination.
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.
TIXT had positive earnings in 4 of the past 5 years.
TIXT had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
TIXT has a Return On Assets (-1.35%) which is comparable to the rest of the industry.
TIXT has a Return On Equity (-3.14%) which is in line with its industry peers.
Looking at the Return On Invested Capital, with a value of 2.35%, TIXT is in line with its industry, outperforming 51.28% of the companies in the same industry.
Measured over the past 3 years, the Average Return On Invested Capital for TIXT is below the industry average of 10.27%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | -1.35% | ||
| ROE | -3.14% | ||
| ROIC | 2.35% |
ROA(3y)1.64%
ROA(5y)1.96%
ROE(3y)3.16%
ROE(5y)4.69%
ROIC(3y)5.81%
ROIC(5y)5.86%
1.3 Margins
The Operating Margin of TIXT (3.65%) is comparable to the rest of the industry.
TIXT's Operating Margin has declined in the last couple of years.
TIXT's Gross Margin of 81.04% is amongst the best of the industry. TIXT outperforms 96.15% of its industry peers.
In the last couple of years the Gross Margin of TIXT has remained more or less at the same level.
| 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
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.
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's Altman-Z score of 0.94 is on the low side compared to the rest of the industry. TIXT is outperformed by 67.95% 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 has a Debt to FCF ratio of 3.70. This is comparable to the rest of the industry: TIXT outperforms 57.69% 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.
Looking at the Debt to Equity ratio, with a value of 0.72, TIXT is doing worse than 61.54% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.72 | ||
| Debt/FCF | 3.7 | ||
| Altman-Z | 0.94 |
ROIC/WACC0.28
WACC8.51%
2.3 Liquidity
A Current Ratio of 0.95 indicates that TIXT may have some problems paying its short term obligations.
TIXT has a worse Current ratio (0.95) than 80.77% of its industry peers.
A Quick Ratio of 0.95 indicates that TIXT may have some problems paying its short term obligations.
With a Quick ratio value of 0.95, TIXT is not doing good in the industry: 80.77% of the companies in the same industry are doing better.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.95 | ||
| Quick Ratio | 0.95 |
3. Growth
3.1 Past
The earnings per share for TIXT have decreased strongly by -57.61% in the last year.
The earnings per share for TIXT have been decreasing by -27.18% on average. This is quite bad
Looking at the last year, TIXT shows a decrease in Revenue. The Revenue has decreased by -1.85% in the last year.
TIXT shows a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 21.12% yearly.
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
TIXT is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 14.24% yearly.
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-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
Based on the Price/Earnings ratio of 7.60, the valuation of TIXT can be described as very cheap.
94.87% of the companies in the same industry are more expensive than TIXT, based on the Price/Earnings ratio.
TIXT's Price/Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 29.36.
A Price/Forward Earnings ratio of 8.87 indicates a reasonable valuation of TIXT.
Based on the Price/Forward Earnings ratio, TIXT is valued cheaply inside the industry as 93.59% of the companies are valued more expensively.
Compared to an average S&P500 Price/Forward Earnings ratio of 22.65, TIXT is valued rather cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 7.6 | ||
| Fwd PE | 8.87 |
4.2 Price Multiples
TIXT's Enterprise Value to EBITDA ratio is rather cheap when compared to the industry. TIXT is cheaper than 91.03% of the companies in the same industry.
TIXT's Price/Free Cash Flow ratio is rather cheap when compared to the industry. TIXT is cheaper than 98.72% of the companies in the same industry.
| 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
TIXT does not give a dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
NYSE:TIXT (2/27/2025, 3:28:36 PM)
2.965
-0.14 (-4.35%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustryIT Services
Earnings (Last)
Earnings (Next)
Inst Owners49.39%
Inst Owner Change9.12%
Ins Owners1.24%
Ins Owner ChangeN/A
Market Cap826.20M
Analysts48.24
Price Target6.92 (133.39%)
Short Float %5.55%
Short Ratio7.62
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)-0.81%
PT rev (3m)33.47%
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 | 7.6 | ||
| Fwd PE | 8.87 | ||
| P/S | 0.31 | ||
| P/FCF | 2.01 | ||
| P/OCF | 1.6 | ||
| P/B | 0.42 | ||
| P/tB | N/A | ||
| EV/EBITDA | 5.26 |
EPS(TTM)0.39
EY13.15%
EPS(NY)0.33
Fwd EY11.27%
FCF(TTM)1.48
FCFY49.87%
OCF(TTM)1.86
OCFY62.58%
SpS9.54
BVpS6.98
TBVpS-4.88
PEG (NY)N/A
PEG (5Y)N/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | -1.35% | ||
| ROE | -3.14% | ||
| ROCE | 2.57% | ||
| ROIC | 2.35% | ||
| ROICexc | 2.46% | ||
| ROICexgc | 29.89% | ||
| 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)5.81%
ROIC(5y)5.86%
ROICexc(3y)6.05%
ROICexc(5y)6.11%
ROICexgc(3y)42.43%
ROICexgc(5y)59.58%
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
WACC8.51%
ROIC/WACC0.28
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%