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TELUS INTERNATIONAL CDA INC (TIXT) Stock Fundamental Analysis

NYSE:TIXT - New York Stock Exchange, Inc. - CA87975H1001 - Common Stock - Currency: USD

3.96  +0.03 (+0.76%)

After market: 3.96 0 (0%)

Fundamental Rating

4

TIXT gets a fundamental rating of 4 out of 10. The analysis compared the fundamentals against 82 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.


Dividend Valuation Growth Profitability Health

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4

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.
In the past 5 years TIXT has always been profitable.
TIXT had a positive operating cash flow in each of the past 5 years.
TIXT Yearly Net Income VS EBIT VS OCF VS FCFTIXT Yearly Net Income VS EBIT VS OCF VS FCFYearly Net Income VS EBIT VS OCF VS FCF 2017 2018 2019 2020 2021 2022 2023 100M 200M 300M 400M

1.2 Ratios

The Return On Assets of TIXT (0.66%) is comparable to the rest of the industry.
With a Return On Equity value of 1.51%, TIXT perfoms like the industry average, outperforming 58.23% of the companies in the same industry.
TIXT's Return On Invested Capital of 3.30% is in line compared to the rest of the industry. TIXT outperforms 55.70% of its industry peers.
The Average Return On Invested Capital over the past 3 years for TIXT is below the industry average of 9.86%.
Industry RankSector Rank
ROA 0.66%
ROE 1.51%
ROIC 3.3%
ROA(3y)2.81%
ROA(5y)3.42%
ROE(3y)5.77%
ROE(5y)10.93%
ROIC(3y)6.55%
ROIC(5y)7.06%
TIXT Yearly ROA, ROE, ROICTIXT Yearly ROA, ROE, ROICYearly ROA, ROE, ROIC 2017 2018 2019 2020 2021 2022 2023 5 10 15 20 25

1.3 Margins

With a Profit Margin value of 1.17%, TIXT perfoms like the industry average, outperforming 54.43% of the companies in the same industry.
TIXT's Profit Margin has declined in the last couple of years.
The Operating Margin of TIXT (5.98%) is comparable to the rest of the industry.
In the last couple of years the Operating Margin of TIXT has declined.
The Gross Margin of TIXT (81.91%) is better than 96.20% of its industry peers.
TIXT's Gross Margin has been stable in the last couple of years.
Industry RankSector Rank
OM 5.98%
PM (TTM) 1.17%
GM 81.91%
OM growth 3Y-8.19%
OM growth 5Y-4.3%
PM growth 3Y-32.58%
PM growth 5Y-18.78%
GM growth 3Y-0.65%
GM growth 5Y0.96%
TIXT Yearly Profit, Operating, Gross MarginsTIXT Yearly Profit, Operating, Gross MarginsYearly Profit, Operating, Gross Margins 2017 2018 2019 2020 2021 2022 2023 20 40 60 80

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2

2. Health

2.1 Basic Checks

The Return on Invested Capital (ROIC) is below the Cost of Capital (WACC), so TIXT is destroying value.
Compared to 1 year ago, TIXT has more shares outstanding
TIXT has more shares outstanding than it did 5 years ago.
TIXT has a worse debt/assets ratio than last year.
TIXT Yearly Shares OutstandingTIXT Yearly Shares OutstandingYearly Shares Outstanding 2018 2019 2020 2021 2022 2023 50M 100M 150M 200M 250M
TIXT Yearly Total Debt VS Total AssetsTIXT Yearly Total Debt VS Total AssetsYearly Total Debt VS Total Assets 2018 2019 2020 2021 2022 2023 1B 2B 3B 4B

2.2 Solvency

Based on the Altman-Z score of 1.04, we must say that TIXT is in the distress zone and has some risk of bankruptcy.
TIXT's Altman-Z score of 1.04 is on the low side compared to the rest of the industry. TIXT is outperformed by 69.62% of its industry peers.
The Debt to FCF ratio of TIXT is 3.94, which is a good value as it means it would take TIXT, 3.94 years of fcf income to pay off all of its debts.
TIXT has a Debt to FCF ratio (3.94) which is comparable to the rest of the industry.
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 63.29% of the companies in the same industry.
Industry RankSector Rank
Debt/Equity 0.72
Debt/FCF 3.94
Altman-Z 1.04
ROIC/WACC0.33
WACC10.13%
TIXT Yearly LT Debt VS Equity VS FCFTIXT Yearly LT Debt VS Equity VS FCFYearly LT Debt VS Equity VS FCF 2017 2018 2019 2020 2021 2022 2023 500M 1B 1.5B 2B

2.3 Liquidity

TIXT has a Current Ratio of 1.02. This is a normal value and indicates that TIXT is financially healthy and should not expect problems in meeting its short term obligations.
Looking at the Current ratio, with a value of 1.02, TIXT is doing worse than 79.75% of the companies in the same industry.
A Quick Ratio of 1.02 indicates that TIXT should not have too much problems paying its short term obligations.
TIXT has a Quick ratio of 1.02. This is in the lower half of the industry: TIXT underperforms 75.95% of its industry peers.
Industry RankSector Rank
Current Ratio 1.02
Quick Ratio 1.02
TIXT Yearly Current Assets VS Current LiabilitesTIXT Yearly Current Assets VS Current LiabilitesYearly Current Assets VS Current Liabilites 2018 2019 2020 2021 2022 2023 200M 400M 600M 800M

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4

3. Growth

3.1 Past

The earnings per share for TIXT have decreased strongly by -31.68% in the last year.
TIXT shows a small growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 0.96% yearly.
TIXT shows a small growth in Revenue. In the last year, the Revenue has grown by 0.49%.
Measured over the past years, TIXT shows a very strong growth in Revenue. The Revenue has been growing by 26.54% on average per year.
EPS 1Y (TTM)-31.68%
EPS 3Y-25.68%
EPS 5Y0.96%
EPS Q2Q%-76.19%
Revenue 1Y (TTM)0.49%
Revenue growth 3Y19.63%
Revenue growth 5Y26.54%
Sales Q2Q%-0.75%

3.2 Future

TIXT is expected to show a very negative growth in Earnings Per Share. In the coming years, the EPS will decrease by -16.88% yearly.
The Revenue is expected to grow by 1.35% on average over the next years.
EPS Next Y-53.64%
EPS Next 2Y-33.03%
EPS Next 3Y-16.88%
EPS Next 5YN/A
Revenue Next Year-2.61%
Revenue Next 2Y-0.24%
Revenue Next 3Y1.35%
Revenue Next 5YN/A

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 decreasing.
The Revenue growth rate is decreasing: in the next years the growth will be less than in the last years.
TIXT Yearly Revenue VS EstimatesTIXT Yearly Revenue VS EstimatesYearly Revenue VS Estimates 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2029 1B 2B 3B 4B 5B
TIXT Yearly EPS VS EstimatesTIXT Yearly EPS VS EstimatesYearly EPS VS Estimates 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2029 0.2 0.4 0.6 0.8 1

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7

4. Valuation

4.1 Price/Earnings Ratio

Based on the Price/Earnings ratio of 5.74, the valuation of TIXT can be described as very cheap.
Based on the Price/Earnings ratio, TIXT is valued cheaply inside the industry as 96.20% of the companies are valued more expensively.
When comparing the Price/Earnings ratio of TIXT to the average of the S&P500 Index (28.58), we can say TIXT is valued rather cheaply.
The Price/Forward Earnings ratio is 9.60, which indicates a very decent valuation of TIXT.
Based on the Price/Forward Earnings ratio, TIXT is valued cheaply inside the industry as 93.67% of the companies are valued more expensively.
When comparing the Price/Forward Earnings ratio of TIXT to the average of the S&P500 Index (24.47), we can say TIXT is valued rather cheaply.
Industry RankSector Rank
PE 5.74
Fwd PE 9.6
TIXT Price Earnings VS Forward Price EarningsTIXT Price Earnings VS Forward Price Earnings ChartPrice Earnings - Forward Price Earnings PE FPE 10 20 30 40

4.2 Price Multiples

Based on the Enterprise Value to EBITDA ratio, TIXT is valued cheaply inside the industry as 91.14% of the companies are valued more expensively.
98.73% of the companies in the same industry are more expensive than TIXT, based on the Price/Free Cash Flow ratio.
Industry RankSector Rank
P/FCF 2.72
EV/EBITDA 5.3
TIXT Per share dataTIXT EPS, Sales, OCF, FCF, BookValue per sharePer Share Data Per Share 0 5

4.3 Compensation for Growth

TIXT's earnings are expected to decrease with -16.88% in the coming years. This may justify a cheaper valuation.
PEG (NY)N/A
PEG (5Y)5.98
EPS Next 2Y-33.03%
EPS Next 3Y-16.88%

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0

5. Dividend

5.1 Amount

No dividends for TIXT!.
Industry RankSector Rank
Dividend Yield N/A

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TELUS INTERNATIONAL CDA INC

NYSE:TIXT (1/24/2025, 8:11:00 PM)

After market: 3.96 0 (0%)

3.96

+0.03 (+0.76%)

Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustryIT Services
Earnings (Last)11-08 2024-11-08/bmo
Earnings (Next)02-13 2025-02-13/amc
Inst Owners35.23%
Inst Owner Change0.07%
Ins Owners1.12%
Ins Owner ChangeN/A
Market Cap1.10B
Analysts50
Price Target6.97 (76.01%)
Short Float %3.03%
Short Ratio4.6
Dividend
Industry RankSector 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)134.84%
Min EPS beat(2)-19.37%
Max EPS beat(2)289.04%
EPS beat(4)2
Avg EPS beat(4)70.69%
Min EPS beat(4)-19.37%
Max EPS beat(4)289.04%
EPS beat(8)4
Avg EPS beat(8)35.65%
EPS beat(12)8
Avg EPS beat(12)25.92%
EPS beat(16)N/A
Avg EPS beat(16)N/A
Revenue beat(2)0
Avg Revenue beat(2)-3.39%
Min Revenue beat(2)-6.5%
Max Revenue beat(2)-0.28%
Revenue beat(4)0
Avg Revenue beat(4)-3.36%
Min Revenue beat(4)-6.5%
Max Revenue beat(4)-0.28%
Revenue beat(8)0
Avg Revenue beat(8)-3.86%
Revenue beat(12)0
Avg Revenue beat(12)-3.45%
Revenue beat(16)N/A
Avg Revenue beat(16)N/A
PT rev (1m)-2.58%
PT rev (3m)21.3%
EPS NQ rev (1m)0%
EPS NQ rev (3m)-106.31%
EPS NY rev (1m)0%
EPS NY rev (3m)-2.99%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)-9.5%
Revenue NY rev (1m)0%
Revenue NY rev (3m)0.37%
Valuation
Industry RankSector Rank
PE 5.74
Fwd PE 9.6
P/S 0.41
P/FCF 2.72
P/OCF 2.15
P/B 0.54
P/tB N/A
EV/EBITDA 5.3
EPS(TTM)0.69
EY17.42%
EPS(NY)0.41
Fwd EY10.42%
FCF(TTM)1.46
FCFY36.82%
OCF(TTM)1.84
OCFY46.52%
SpS9.55
BVpS7.35
TBVpS-4.88
PEG (NY)N/A
PEG (5Y)5.98
Profitability
Industry RankSector Rank
ROA 0.66%
ROE 1.51%
ROCE 4%
ROIC 3.3%
ROICexc 3.42%
ROICexgc 31.48%
OM 5.98%
PM (TTM) 1.17%
GM 81.91%
FCFM 15.27%
ROA(3y)2.81%
ROA(5y)3.42%
ROE(3y)5.77%
ROE(5y)10.93%
ROIC(3y)6.55%
ROIC(5y)7.06%
ROICexc(3y)6.82%
ROICexc(5y)7.49%
ROICexgc(3y)63.62%
ROICexgc(5y)54.72%
ROCE(3y)7.96%
ROCE(5y)8.58%
ROICexcg growth 3Y-10.2%
ROICexcg growth 5Y-9.56%
ROICexc growth 3Y0.23%
ROICexc growth 5Y-15.97%
OM growth 3Y-8.19%
OM growth 5Y-4.3%
PM growth 3Y-32.58%
PM growth 5Y-18.78%
GM growth 3Y-0.65%
GM growth 5Y0.96%
F-Score5
Asset Turnover0.57
Health
Industry RankSector Rank
Debt/Equity 0.72
Debt/FCF 3.94
Debt/EBITDA 3.07
Cap/Depr 33.13%
Cap/Sales 4.02%
Interest Coverage 1.66
Cash Conversion 106.43%
Profit Quality 1309.68%
Current Ratio 1.02
Quick Ratio 1.02
Altman-Z 1.04
F-Score5
WACC10.13%
ROIC/WACC0.33
Cap/Depr(3y)35.56%
Cap/Depr(5y)39.27%
Cap/Sales(3y)4.02%
Cap/Sales(5y)4.19%
Profit Quality(3y)403.54%
Profit Quality(5y)307.5%
High Growth Momentum
Growth
EPS 1Y (TTM)-31.68%
EPS 3Y-25.68%
EPS 5Y0.96%
EPS Q2Q%-76.19%
EPS Next Y-53.64%
EPS Next 2Y-33.03%
EPS Next 3Y-16.88%
EPS Next 5YN/A
Revenue 1Y (TTM)0.49%
Revenue growth 3Y19.63%
Revenue growth 5Y26.54%
Sales Q2Q%-0.75%
Revenue Next Year-2.61%
Revenue Next 2Y-0.24%
Revenue Next 3Y1.35%
Revenue Next 5YN/A
EBIT growth 1Y-34.3%
EBIT growth 3Y9.84%
EBIT growth 5Y21.1%
EBIT Next Year30.2%
EBIT Next 3Y6.6%
EBIT Next 5YN/A
FCF growth 1Y26.09%
FCF growth 3Y26.14%
FCF growth 5Y54.81%
OCF growth 1Y19.3%
OCF growth 3Y23.72%
OCF growth 5Y39.73%