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Thomson Reuters (TSE:TRI)
TSX:TRI
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Thomson Reuters
(TSX:TRI)
80Outperform
Positive Factors
Financial Performance
Thomson Reuters Corp reported better than expected adjusted EBITDA and EPS due to cost management, despite slightly lighter revenues.
Segment Growth
The company's big three segments showed strong 9% organic growth, which was a highlight in their financial performance.
Negative Factors
GenAI Product Adoption
Checks continue to find still-limited user adoption of CoCounsel due to a perception of low quality output.
Revenue Decline
Reuters News experienced a 6.7% decline in revenue year-over-year, with a significant drop in segment EBITDA.
Thomson Reuters (TRI) vs. S&P 500 (SPY)
Market Cap
$115.47B
Dividend Yield1.19%
Average Volume (3M)356.71K
Price to Earnings (P/E)38.5
Beta (1Y)0.58
Revenue Growth8.16%
EPS Growth-5.93%
CountryCA
Employees26,400
SectorIndustrials
Sector Strength77
IndustrySpecialty Business Services
Share Statistics
EPS (TTM)1.55
Shares Outstanding450,500,000
10 Day Avg. Volume336,215
30 Day Avg. Volume356,709
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)0.00
Price to Cash Flow (P/CF)0.00
P/FCF Ratio0.00
Enterprise Value/Market Cap0.99
Enterprise Value/RevenueN/A
Enterprise Value/Gross Profit19.87
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$256.74Price Target Upside-1.60% Downside
Rating ConsensusHold
Number of Analyst Covering10
Thomson Reuters Business Overview & Revenue Model
Company DescriptionThomson Reuters (TRI) is a global leader in providing business information services. The company operates across several sectors, including legal, tax and accounting, intellectual property, and media. Its core products and services include highly specialized information-enabled software and tools for legal professionals, tax and accounting professionals, and corporations. Additionally, Thomson Reuters offers news and media services through Reuters News, a leading international news agency.
How the Company Makes MoneyThomson Reuters generates revenue through a subscription-based model for its various professional information and software tools, primarily serving legal, tax, accounting, and compliance sectors. The company earns revenue by offering these tools on a recurring subscription basis, providing customers with continuous updates and support. Additionally, Thomson Reuters monetizes its Reuters News division through licensing agreements and providing content to media outlets and financial institutions. Strategic partnerships, such as collaborations with major technology firms for data integration and analytics, play a significant role in enhancing their product offerings and expanding market reach, thereby contributing to their revenue streams.
Thomson Reuters Financial Statement Overview
Summary
Thomson Reuters presents a robust financial profile characterized by solid profitability, efficient balance sheet management, and strong cash flow generation. The company shows consistent revenue and profit growth, supported by effective cost control and a healthy equity position. While leverage is manageable, further improvements in cash flow growth and cost management could bolster financial stability and support future growth.Income Statement
Thomson Reuters shows a solid financial performance as evidenced by a strong gross profit margin of 64.2% and a net profit margin of 29.7% for TTM (Trailing-Twelve-Months). The company has demonstrated consistent revenue growth with a 1.0% increase from the previous annual report and a robust EBIT margin of 29.1%. The EBITDA margin also remains healthy at 41.5%. This reflects both excellent operational efficiency and profitability. However, a minor decline in gross profit margin from the annual report suggests room for improvement in cost management.85
Very Positive
Balance Sheet
The balance sheet of Thomson Reuters reflects a strong equity position with an equity ratio of 66.5% and a reasonable debt-to-equity ratio of 0.23. The return on equity stands impressively at 17.6%, indicating effective use of shareholder funds to generate income. However, the overall leverage could be a concern if debt levels rise, as indicated by total debt still being significant despite a decrease from the previous year.78
Positive
Cash Flow
Thomson Reuters exhibits strong cash flow generation capabilities with a stable free cash flow to net income ratio of 0.86 and an operating cash flow to net income ratio of 1.14 for TTM (Trailing-Twelve-Months). The free cash flow growth rate remains flat, suggesting stable but not improved cash flow generation. This consistent cash flow supports ongoing investments and shareholder returns, though growth opportunities may require further improvement.82
Very Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 7.26B | 6.79B | 6.63B | 6.35B | 5.98B | Gross Profit |
| 5.76B | 2.70B | 4.22B | 3.87B | 3.71B | EBIT |
| 2.11B | 2.33B | 1.83B | 1.24B | 1.93B | EBITDA |
| 3.05B | 2.95B | 3.01B | 2.02B | 2.76B | Net Income Common Stockholders |
| 2.21B | 2.69B | 1.89B | -553.00M | 1.69B |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 1.89B | 1.36B | 1.27B | 886.00M | 2.40B | Total Assets |
| 18.44B | 18.68B | 21.71B | 22.15B | 17.88B | Total Debt |
| 3.08B | 3.54B | 4.76B | 3.79B | 3.77B | Net Debt |
| 1.22B | 2.34B | 3.69B | 3.01B | 1.99B | Total Liabilities |
| 6.43B | 7.62B | 9.76B | 8.31B | 7.90B | Stockholders Equity |
| 12.01B | 11.06B | 11.95B | 13.83B | 9.98B |
| Cash Flow | Free Cash Flow | |||
| 1.85B | 1.80B | 1.32B | 1.29B | 1.24B | Operating Cash Flow |
| 2.46B | 2.34B | 1.92B | 1.77B | 1.75B | Investing Cash Flow |
| 680.00M | 3.51B | -462.00M | -504.00M | -138.00M | Financing Cash Flow |
| -2.46B | -5.63B | -1.16B | -2.27B | -644.00M |
Thomson Reuters Technical Analysis
Positive
260.92
Price Trends
248.93
Positive
243.42
Positive
235.45
Positive
Market Momentum
3.31
Negative
64.38
Neutral
66.96
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:TRI, the sentiment is Positive. The current price of 260.92 is above the 20-day moving average (MA) of 251.03, above the 50-day MA of 248.93, and above the 200-day MA of 235.45, indicating a bullish trend. The MACD of 3.31 indicates Negative momentum. The RSI at 64.38 is Neutral, neither overbought nor oversold. The STOCH value of 66.96 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for TSE:TRI.
Thomson Reuters Peers Comparison
Overall Rating
UnderperformOutperform
Sector (64)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
80 Outperform | $115.47B | 38.48 | 18.46% | 1.19% | 8.16% | -5.93% | |
71 Outperform | $25.99B | 50.89 | 7.71% | 1.11% | 18.26% | 141.71% | |
71 Outperform | C$1.60B | 9.98 | 8.50% | 4.70% | -4.75% | 68.04% | |
71 Outperform | C$1.60B | 9.92 | 8.50% | 4.71% | -4.75% | 68.04% | |
64 Neutral | $4.25B | 11.69 | 5.23% | 249.83% | 4.04% | -9.46% |
* Industrials Sector Average
Performance Comparison
TSE:TRI
Thomson Reuters
260.92
34.34
15.16%
TSE:RBA
RB Global
142.21
43.76
44.45%
TSE:TCL.B
Transcontinental Inc. Class B
19.28
7.49
63.53%
TSE:TCL.A
Transcontinental
19.22
6.85
55.38%
Thomson Reuters Earnings Call Summary
Earnings Call Date:May 01, 2025
(Q1-2025)
| % Change Since: 1.71%|
Next Earnings Date:Jul 31, 2025
Earnings Call Sentiment Positive
The earnings call presented a positive outlook with strong revenue growth and reaffirmed guidance. Notable achievements include successful product launches, a strategic acquisition, and a dividend increase, although there were challenges such as declines in Reuters News and Global Print revenues. Overall, the highlights outweigh the lowlights.Q1-2025 Updates
Positive Updates
Strong Start to Fiscal Year 2025
2025 began positively with revenue at the high end of the outlook and profits exceeding expectations. Total company organic revenues rose 6%, with the Big Three segments growing by 9%.
Reaffirmed Full-Year 2025 Outlook
The company reaffirmed its full-year 2025 outlook, expecting organic growth in the range of 7% to 7.5%, including approximately 9% for the Big Three segments and margins to rise by 75 basis points year-over-year to approximately 39%.
Successful Product Launches and Acquisitions
The first quarter saw the launch of CoCounsel Tax, Audit and Accounting, an AI-powered assistant, and the acquisition of SafeSend for $600 million, which is off to a strong start with a smooth integration.
Dividend Increase
The company raised its 2025 annual dividend by 10% for the fourth consecutive year to $2.38 per share.
Tax & Accounting Segment Strength
The Tax & Accounting segment showed strong performance with organic revenue growth of 11%, driven by Latin American business and tax compliance offerings.
Negative Updates
Decline in Reuters News Revenue
Reuters News organic revenues declined 7% due to a difficult comparison from significant transactional generative AI licensing revenue in the prior year period.
Global Print Revenue Decline
Global Print organic revenues declined 5% year-over-year, in line with expectations.
Adjusted EBITDA Margin Decline
Adjusted EBITDA was essentially unchanged year-over-year at $809 million, reflecting a 40 basis point margin decline to 42.3%.
Company Guidance
During the Thomson Reuters First Quarter 2025 earnings call, CEO Steve Hasker reported that the company started the year positively, with total organic revenues rising by 6% and the Big Three segments experiencing 9% growth. The company reaffirmed its full-year 2025 outlook, anticipating organic growth between 7% and 7.5%, with a 75 basis point increase in margins to approximately 39%. Key contributors to this growth included double-digit expansion in products such as CoCounsel, SurePrep, Pagero, Indirect Tax, and international businesses. Adjusted EBITDA for the quarter was $809 million, reflecting a 40 basis point margin decline to 42.3%. Segment-wise, Legal Professionals saw 8% organic revenue growth, Corporates 9%, and Tax & Accounting 11%, while Reuters News faced a 7% decline. The company also highlighted a strong capital position with $10 billion of capacity through 2027 and a commitment to a balanced capital allocation approach.Thomson Reuters Corporate Events
Private Placements and FinancingBusiness Operations and StrategyRegulatory Filings and Compliance
Thomson Reuters Completes Note Exchange and Plans New Prospectus
Positive
Mar 18, 2025
Thomson Reuters announced the completion of its exchange offers and consent solicitations for certain series of notes, aimed at optimizing its capital structure. The exchange allows holders of old notes to receive new notes issued by TR Finance LLC, a subsidiary, with similar financial terms. This move is expected to align revenue generation with indebtedness and improve the company’s financial flexibility. The company also plans to file a new base shelf prospectus to update guarantees and reflect changes in its financial arrangements.
Private Placements and FinancingBusiness Operations and Strategy
Thomson Reuters Optimizes Capital Structure with Debt Exchange Offers
Neutral
Mar 10, 2025
Thomson Reuters announced that its subsidiary, TR Finance LLC, has filed a final prospectus for the exchange of old notes for new notes, as part of efforts to optimize its capital structure. The exchange offers aim to align revenue generation with indebtedness and provide existing note holders with similar financial terms. Additionally, the company is soliciting consents to amend indentures governing the old notes, which could result in reduced protections for note holders. The proposed amendments are expected to be approved, assuming sufficient consents are received.
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.