TELUS INTERNATIONAL CDA INC (TIXT.CA) Stock Fundamental Analysis
TSX:TIXT - Toronto Stock Exchange - CA87975H1001 - Common Stock - Currency: CAD
Overall TIXT gets a fundamental rating of 4 out of 10. We evaluated TIXT against 13 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 has a correct valuation and a medium growth rate.
1. Profitability
1.1 Basic Checks
In the past year TIXT was profitable.
TIXT had a positive operating cash flow in the past year.
TIXT had positive earnings in 4 of the past 5 years.
Each year in the past 5 years TIXT had a positive operating cash flow.
1.2 Ratios
TIXT has a better Return On Assets (-2.53%) than 61.54% of its industry peers.
With a decent Return On Equity value of -5.84%, TIXT is doing good in the industry, outperforming 69.23% of the companies in the same industry.
TIXT's Return On Invested Capital of 1.19% is fine compared to the rest of the industry. TIXT outperforms 69.23% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for TIXT is significantly below the industry average of 45.49%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | -2.53% | ||
| ROE | -5.84% | ||
| ROIC | 1.19% |
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
Looking at the Operating Margin, with a value of 2.28%, TIXT is in the better half of the industry, outperforming 69.23% of the companies in the same industry.
In the last couple of years the Operating Margin of TIXT has declined.
The Gross Margin of TIXT (80.64%) is better than 84.62% 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 | 2.28% | ||
| PM (TTM) | N/A | ||
| GM | 80.64% |
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.
Compared to 1 year ago, TIXT has more shares outstanding
TIXT has more shares outstanding than it did 5 years ago.
The debt/assets ratio for TIXT has been reduced compared to a year ago.
2.2 Solvency
The Debt to FCF ratio of TIXT is 4.26, which is a neutral value as it means it would take TIXT, 4.26 years of fcf income to pay off all of its debts.
With a decent Debt to FCF ratio value of 4.26, TIXT is doing good in the industry, outperforming 69.23% of the companies in the same industry.
A Debt/Equity ratio of 0.70 indicates that TIXT is somewhat dependend on debt financing.
With a Debt to Equity ratio value of 0.70, TIXT perfoms like the industry average, outperforming 53.85% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.7 | ||
| Debt/FCF | 4.26 | ||
| Altman-Z | N/A |
ROIC/WACC0.15
WACC7.86%
2.3 Liquidity
TIXT has a Current Ratio of 0.86. This is a bad value and indicates that TIXT is not financially healthy enough and could expect problems in meeting its short term obligations.
TIXT has a Current ratio of 0.86. This is in the lower half of the industry: TIXT underperforms 61.54% of its industry peers.
A Quick Ratio of 0.86 indicates that TIXT may have some problems paying its short term obligations.
The Quick ratio of TIXT (0.86) is worse than 61.54% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.86 | ||
| Quick Ratio | 0.86 |
3. Growth
3.1 Past
TIXT shows a strong negative growth in Earnings Per Share. In the last year the EPS decreased by -72.09%.
The earnings per share for TIXT have been decreasing by -26.56% on average. This is quite bad
The Revenue has decreased by -0.30% in the past year.
Measured over the past years, TIXT shows a very strong growth in Revenue. The Revenue has been growing by 21.12% on average per year.
EPS 1Y (TTM)-72.09%
EPS 3Y-26.56%
EPS 5YN/A
EPS Q2Q%-72.73%
Revenue 1Y (TTM)-0.3%
Revenue growth 3Y6.6%
Revenue growth 5Y21.12%
Sales Q2Q%1.98%
3.2 Future
Based on estimates for the next years, TIXT will show a quite strong growth in Earnings Per Share. The EPS will grow by 13.06% on average per year.
The Revenue is expected to grow by 13.57% on average over the next years. This is quite good.
EPS Next Y-18.55%
EPS Next 2Y4.79%
EPS Next 3Y13.06%
EPS Next 5YN/A
Revenue Next Year2.3%
Revenue Next 2Y2.95%
Revenue Next 3Y3.81%
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.
4. Valuation
4.1 Price/Earnings Ratio
A Price/Earnings ratio of 15.36 indicates a correct valuation of TIXT.
Based on the Price/Earnings ratio, TIXT is valued cheaply inside the industry as 92.31% of the companies are valued more expensively.
When comparing the Price/Earnings ratio of TIXT to the average of the S&P500 Index (27.45), we can say TIXT is valued slightly cheaper.
Based on the Price/Forward Earnings ratio of 8.50, the valuation of TIXT can be described as reasonable.
Based on the Price/Forward Earnings ratio, TIXT is valued cheaper than 100.00% of the companies in the same industry.
The average S&P500 Price/Forward Earnings ratio is at 21.90. TIXT is valued rather cheaply when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 15.36 | ||
| Fwd PE | 8.5 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, TIXT is valued cheaply inside the industry as 92.31% of the companies are valued more expensively.
Based on the Price/Free Cash Flow ratio, TIXT is valued cheaply inside the industry as 100.00% of the companies are valued more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 2.95 | ||
| EV/EBITDA | 6.17 |
4.3 Compensation for Growth
TIXT's earnings are expected to grow with 13.06% in the coming years. This may justify a more expensive valuation.
PEG (NY)N/A
PEG (5Y)N/A
EPS Next 2Y4.79%
EPS Next 3Y13.06%
5. Dividend
5.1 Amount
No dividends for TIXT!.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
TSX:TIXT (7/3/2025, 7:00:00 PM)
5.07
-0.01 (-0.2%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustryIT Services
Earnings (Last)
Earnings (Next)
Inst Owners45.17%
Inst Owner ChangeN/A
Ins Owners1.59%
Ins Owner ChangeN/A
Market Cap1.40B
Analysts50
Price Target4.52 (-10.85%)
Short Float %N/A
Short RatioN/A
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)-17.78%
Min EPS beat(2)-47.72%
Max EPS beat(2)12.17%
EPS beat(4)2
Avg EPS beat(4)58.53%
Min EPS beat(4)-47.72%
Max EPS beat(4)289.04%
EPS beat(8)3
Avg EPS beat(8)30.43%
EPS beat(12)7
Avg EPS beat(12)21.57%
EPS beat(16)11
Avg EPS beat(16)18.39%
Revenue beat(2)2
Avg Revenue beat(2)0.84%
Min Revenue beat(2)0.72%
Max Revenue beat(2)0.97%
Revenue beat(4)2
Avg Revenue beat(4)-1.27%
Min Revenue beat(4)-6.5%
Max Revenue beat(4)0.97%
Revenue beat(8)2
Avg Revenue beat(8)-1.94%
Revenue beat(12)2
Avg Revenue beat(12)-3.09%
Revenue beat(16)2
Avg Revenue beat(16)-2.74%
PT rev (1m)-36.78%
PT rev (3m)-36.66%
EPS NQ rev (1m)0%
EPS NQ rev (3m)-12.26%
EPS NY rev (1m)0%
EPS NY rev (3m)-2.5%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)0.92%
Revenue NY rev (1m)0%
Revenue NY rev (3m)-0.11%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 15.36 | ||
| Fwd PE | 8.5 | ||
| P/S | 0.39 | ||
| P/FCF | 2.95 | ||
| P/OCF | 2.25 | ||
| P/B | 0.53 | ||
| P/tB | N/A | ||
| EV/EBITDA | 6.17 |
EPS(TTM)0.33
EY6.51%
EPS(NY)0.6
Fwd EY11.77%
FCF(TTM)1.72
FCFY33.88%
OCF(TTM)2.26
OCFY44.53%
SpS13.11
BVpS9.58
TBVpS-6.64
PEG (NY)N/A
PEG (5Y)N/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | -2.53% | ||
| ROE | -5.84% | ||
| ROCE | 1.65% | ||
| ROIC | 1.19% | ||
| ROICexc | 1.24% | ||
| ROICexgc | 17.43% | ||
| OM | 2.28% | ||
| PM (TTM) | N/A | ||
| GM | 80.64% | ||
| FCFM | 13.1% |
ROA(3y)1.64%
ROA(5y)1.96%
ROE(3y)3.16%
ROE(5y)4.69%
ROIC(3y)4.57%
ROIC(5y)4.61%
ROICexc(3y)4.76%
ROICexc(5y)4.8%
ROICexgc(3y)33.38%
ROICexgc(5y)46.87%
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 | 0.7 | ||
| Debt/FCF | 4.26 | ||
| Debt/EBITDA | 3.53 | ||
| Cap/Depr | 33.74% | ||
| Cap/Sales | 4.12% | ||
| Interest Coverage | 0.7 | ||
| Cash Conversion | 118.86% | ||
| Profit Quality | N/A | ||
| Current Ratio | 0.86 | ||
| Quick Ratio | 0.86 | ||
| Altman-Z | N/A |
F-Score4
WACC7.86%
ROIC/WACC0.15
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)-72.09%
EPS 3Y-26.56%
EPS 5YN/A
EPS Q2Q%-72.73%
EPS Next Y-18.55%
EPS Next 2Y4.79%
EPS Next 3Y13.06%
EPS Next 5YN/A
Revenue 1Y (TTM)-0.3%
Revenue growth 3Y6.6%
Revenue growth 5Y21.12%
Sales Q2Q%1.98%
Revenue Next Year2.3%
Revenue Next 2Y2.95%
Revenue Next 3Y3.81%
Revenue Next 5Y13.57%
EBIT growth 1Y-72.4%
EBIT growth 3Y-22.45%
EBIT growth 5Y-4.2%
EBIT Next Year378.91%
EBIT Next 3Y77.25%
EBIT Next 5Y72.45%
FCF growth 1Y18.64%
FCF growth 3Y24.79%
FCF growth 5Y35.89%
OCF growth 1Y17.05%
OCF growth 3Y18.46%
OCF growth 5Y29.56%