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Sapiens International (SPNS)
NASDAQ:SPNS
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Sapiens
(NASDAQ:SPNS)
77Outperform
Positive Factors
Financial Performance
The ongoing shift to high margin SaaS revenue helped drive better margins.
Growth Potential
Management remains confident in its ability to continue capturing share in the core system modernization opportunity, fueled by increased investments in key strategic areas.
Negative Factors
Cloud Transition Challenges
There are ongoing transitions and progression challenges in Sapiens' cloud and SaaS model.
Revenue Outlook
Management lowered the FY24 guide and provided a below-consensus preliminary FY25 revenue growth outlook.
Sapiens (SPNS) vs. S&P 500 (SPY)
Market Cap
$1.44B
Dividend Yield2.22%
Average Volume (3M)154.56K
Price to Earnings (P/E)20.0
Beta (1Y)0.96
Revenue Growth5.40%
EPS Growth14.68%
CountryUS
Employees4,850
SectorTechnology
Sector Strength49
IndustrySoftware - Application
Share Statistics
EPS (TTM)1.28
Shares Outstanding55,887,226
10 Day Avg. Volume177,403
30 Day Avg. Volume154,558
Financial Highlights & Ratios
PEG Ratio1.36
Price to Book (P/B)N/A
Price to Sales (P/S)2.93
Price to Cash Flow (P/CF)N/A
P/FCF Ratio0.00
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$29.00Price Target Upside11.37% Upside
Rating ConsensusHold
Number of Analyst Covering5
Sapiens Business Overview & Revenue Model
Company DescriptionSapiens International Corporation N.V. (SPNS) is a global provider of software solutions for the insurance industry, offering a comprehensive suite of software platforms and services tailored for life, pension, annuity, property and casualty, reinsurance, and financial markets. The company's offerings include core processing software, business intelligence, digital services, and cloud-based solutions, designed to enhance operational efficacy and customer engagement for insurers worldwide.
How the Company Makes MoneySapiens generates revenue primarily through the sale of software licenses, subscription services, and professional services. Software licenses and subscriptions form the core of their revenue model, with clients typically engaging in long-term contracts that provide consistent income streams. The company also earns from implementation and integration services, consulting, and maintenance support offered to its clients. Strategic partnerships with other technology firms and insurance providers also contribute to its revenue, enabling Sapiens to expand its market reach and enhance its product offerings.
Sapiens Financial Statement Overview
Summary
Sapiens displays strong financial health with consistent revenue growth, robust profitability metrics, low leverage, and effective cash flow management. The company is well-positioned for sustained success, though continuous attention to market trends and operational efficiency is crucial.Income Statement
Sapiens has demonstrated consistent revenue growth, with a 5.40% increase in 2024 over the previous year. The company maintains healthy margins, including a gross profit margin of 43.89% and a net profit margin of 13.31%. The EBIT margin stands at 15.83%, indicating efficient cost management. The EBITDA margin of 20.26% further highlights operational efficiency. Overall, the income statement reflects strong profitability and growth potential.85
Very Positive
Balance Sheet
Sapiens exhibits a solid balance sheet with a low debt-to-equity ratio of 0.13, indicating low leverage and reduced financial risk. The return on equity (ROE) is robust at 15.05%, showcasing effective use of equity capital to generate profits. The equity ratio of 69.33% suggests a strong equity base. Overall, the balance sheet highlights financial stability and a conservative approach to debt.80
Positive
Cash Flow
The company has a notable free cash flow growth rate of 13.09%, underscoring its capability to generate cash. The operating cash flow to net income ratio is 1.14, indicating strong cash conversion from operations. The free cash flow to net income ratio is also healthy at 1.10. Overall, Sapiens demonstrates solid cash flow generation and effective capital management.78
Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 542.38M | 514.58M | 474.74M | 461.04M | 382.90M | Gross Profit |
| 238.11M | 219.59M | 200.16M | 187.84M | 155.97M | EBIT |
| 85.85M | 78.87M | 66.49M | 57.49M | 45.00M | EBITDA |
| 109.90M | 94.86M | 83.52M | 84.12M | 63.62M | Net Income Common Stockholders |
| 72.18M | 62.44M | 52.59M | 47.17M | 33.77M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 216.19M | 202.12M | 180.28M | 210.24M | 182.56M | Total Assets |
| 691.71M | 689.62M | 666.75M | 714.99M | 714.16M | Total Debt |
| 63.75M | 87.05M | 116.57M | 148.36M | 177.17M | Net Debt |
| -99.94M | -39.67M | -43.72M | -41.88M | 24.61M | Total Liabilities |
| 212.08M | 239.68M | 263.90M | 306.27M | 330.47M | Stockholders Equity |
| 479.63M | 447.27M | 402.85M | 408.72M | 383.69M |
| Cash Flow | Free Cash Flow | |||
| 79.35M | 70.16M | 34.73M | 68.69M | 47.01M | Operating Cash Flow |
| 82.22M | 79.42M | 43.78M | 80.54M | 58.26M | Investing Cash Flow |
| 9.28M | -72.78M | -12.44M | 125.00K | -114.60M | Financing Cash Flow |
| -52.15M | -43.34M | -58.38M | -39.96M | 143.32M |
Sapiens Technical Analysis
Negative
26.04
Price Trends
26.50
Negative
26.45
Negative
30.79
Negative
Market Momentum
-0.02
Positive
45.95
Neutral
48.56
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SPNS, the sentiment is Negative. The current price of 26.04 is below the 20-day moving average (MA) of 26.24, below the 50-day MA of 26.50, and below the 200-day MA of 30.79, indicating a bearish trend. The MACD of -0.02 indicates Positive momentum. The RSI at 45.95 is Neutral, neither overbought nor oversold. The STOCH value of 48.56 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for SPNS.
Sapiens Risk Analysis
Sapiens disclosed 39 risk factors in its most recent earnings report. Sapiens reported the most risks in the “Tech & Innovation” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Sapiens Peers Comparison
Overall Rating
UnderperformOutperform
Sector (57)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
77 Outperform | $1.44B | 19.98 | 15.57% | 2.22% | 5.40% | 14.68% | |
72 Outperform | $1.29B | 159.86 | 3.46% | ― | 22.47% | 872.41% | |
64 Neutral | $1.16B | ― | -39.88% | ― | 21.66% | 8.66% | |
62 Neutral | $1.39B | 529.90 | 4.45% | ― | 15.51% | -55.49% | |
61 Neutral | $1.27B | ― | -6.36% | ― | 4.18% | 27.11% | |
60 Neutral | $1.17B | ― | -31.90% | ― | 8.32% | 2.04% | |
57 Neutral | $19.52B | 9.58 | -12.47% | 2.79% | 5.43% | -24.71% |
* Technology Sector Average
Performance Comparison
SPNS
Sapiens
26.04
-3.73
-12.53%
SPT
Sprout Social
19.66
-35.45
-64.33%
SEMR
SEMrush Holdings
8.84
-3.19
-26.52%
MLNK
MeridianLink
16.62
-0.20
-1.19%
AMPL
Amplitude
8.77
-0.86
-8.93%
ENFN
Enfusion
10.81
1.65
18.01%
Sapiens Earnings Call Summary
Earnings Call Date: Feb 18, 2025 | % Change Since: 1.28% | Next Earnings Date: May 6, 2025
Earnings Call Sentiment Positive
The earnings call reflects a generally positive performance with notable revenue growth and strategic advancements despite challenges such as currency headwinds and macroeconomic uncertainties.Highlights
Revenue Growth
Q4 2024 revenue was $134 million, a 2.6% increase compared to last year. Full-year 2024 revenues totaled $542 million, a 5.4% increase compared to 2023.
Recurring Revenue Increase
Annual recurring revenue in Q4 2024 reached $175 million, reflecting a 6.5% increase from Q4 of last year. Recurring and reoccurring revenues in Q4 2024 represented 72.5% of total revenue, showing a 3.4% increase from last year.
North America Growth
North America businesses delivered robust growth in 2024, with Q4 closing five wins with new and existing customers, contributing to a 6.3% growth in the region for the year.
AI and Innovation Recognition
Sapiens was honored for the third consecutive time by Celent for customer base and support for underwriting in North America, reinforcing leadership in life underwriting solutions.
Strategic Partnerships
Sapiens strengthened partnerships with system integrators like Deloitte and Microsoft, enhancing market opportunities and product innovation.
Lowlights
Currency Headwinds
Q4 2024 faced currency headwinds, impacting revenue by $2 million compared to constant currency figures.
Macroeconomic Uncertainty
Macroeconomic uncertainty in global markets, including North America and the Middle East, may delay new deals and impact revenue growth.
Transition to SaaS Impact
Transition to SaaS is expected to create an estimated 2% to 3% revenue headwind in 2025.
Company Guidance
During the call, Sapiens International Corporation provided guidance for its fiscal year 2025, projecting non-GAAP revenue to range between $553 million and $558 million, representing a midpoint growth of 2.4%. This forecast takes into account a currency headwind affecting the euro and pound, with a constant currency growth projection of 3.4%. The company anticipates a non-GAAP operating profit between $98 million and $102 million, with an operating margin of 18% at the midpoint. Key factors impacting growth include a transition to SaaS, which is expected to create a 2% to 3% revenue headwind, strategic investments in the North America P&C platform, and ongoing macroeconomic uncertainties across global markets. Sapiens also highlighted its commitment to expanding new logo acquisitions and driving cross-sell opportunities, aiming to transition over 60% of its customers to the cloud within the next five years.Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.