TIC Solutions, Inc. (NYSE: TIC)

Sector: Industrials Industry: Specialty Business Services CIK: 0002032966
ROIC (Qtr) -0.02
Rev 1y % (Qtr) 0.00
Total Debt (Qtr) 1.72 Bn
Debt/Equity (Qtr) 0.88
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About

Investment thesis

Bull case

  • Healthy cash reserves of 164.43M provide 2.87x coverage of short-term debt 57.38M, demonstrating strong liquidity position and minimal refinancing risk.
  • Tangible assets of 1.12B provide exceptional 24.09x coverage of deferred revenue 46.59M, showing strong service capability backing.
  • Tangible assets of 1.12B provide robust 5.41x coverage of other current liabilities 207.34M, indicating strong asset backing.
  • Operating cash flow of 66.02M provides strong 2.10x coverage of operating expenses 31.36M, showing operational efficiency.
  • Cash position of 164.43M provides strong 3.53x coverage of deferred revenue 46.59M, ensuring service delivery capability.

Bear case

  • Operating cash flow of 66.02M barely covers its investment activities of (860.52M), with a coverage ratio of -0.08, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • Cash reserves of 164.43M provide limited coverage of acquisition spending of (833.16M), which is -0.20x, suggesting aggressive expansion might strain liquidity if market conditions deteriorate.
  • Operating cash flow of 66.02M provides insufficient coverage of deferred revenue obligations of 46.59M, which is 1.42x, raising concerns about future service delivery capabilities.
  • Operating cash flow of 66.02M provides minimal -4.60x coverage of tax expenses of (14.34M), suggesting potential tax planning inefficiencies or unsustainable tax positions.
  • Operating earnings of 5.82M show weak coverage of depreciation charges of 148.54M, with a 0.04 ratio indicating high capital intensity and potential reinvestment needs.

Peer comparison

Companies in the Specialty Business Services
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 CTAS Cintas Corp 120.08 Bn 556.91 33.85 3.24 Bn
2 RELX Relx Plc 56.19 Bn 20.01 4.34 9.82 Bn
3 TRI Thomson Reuters Corp /Can/ 37.42 Bn 24.91 5.00 2.44 Bn
4 CPRT Copart Inc 36.25 Bn 22.74 7.79 0.10 Bn
5 RBA Rb Global Inc. 19.20 Bn 49.09 4.24 4.21 Bn
6 ULS UL Solutions Inc. 14.12 Bn 43.32 4.92 0.74 Bn
7 GPN Global Payments Inc 11.52 Bn 284.78 8.66 16.20 Bn
8 ARMK Aramark 10.37 Bn 32.72 0.55 6.57 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 0.55 2.48
EV to Cash from Ops. EV/CFO 34.91 30.22
EV to Debt EV to Debt 1.34 31.08
EV to EBIT EV/EBIT 396.29 94.66
EV to EBITDA EV/EBITDA 15.63 18.37
EV to Free Cash Flow [EV/FCF] EV/FCF 59.61 -20.73
EV to Market Cap EV to Market Cap 1.42 178.66
EV to Revenue EV/Rev 1.79 8.12
Price to Book Value [P/B] P/B 0.83 5.37
Price to Earnings [P/E] P/E -29.20 65.19
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Div Coverage (Qtr) -694,300.00 -15,800.59
Dividend Payout Ratio % Div Payout % (Qtr) 0.00 10.14
Dividend per Basic Share Div per Share (Qtr) 0.00 0.35
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 0.00 7.65
Interest Coverage Int. cover (Qtr) 0.08 30.46
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) 0.00 -178.22
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) 24.14 155.14
Dividend Growth (1y) % Dividend Growth (1y) % 0.00 5.38
EBIAT Growth (1y) % EBIAT 1y % (Qtr) 0.00 -34.92
EBITDA Growth (1y) % EBITDA 1y % (Qtr) 0.00 -86.28
EBIT Growth (1y) % EBIT 1y % (Qtr) 0.00 -22.62
EBT Growth (1y) % EBT 1y % (Qtr) 0.00 -287.35
EPS Growth (1y) % EPS 1y % (Qtr) 0.00 -118.47
FCF Growth (1y) % FCF 1y % (Qtr) 0.00 -146.43
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) 0.00 2.63
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 0.30 0.84
Cash Payout Ratio Cash Payout (Qtr) 0.00 -0.03
Cash Ratio Cash Ratio (Qtr) 0.50 1.15
Current Ratio Curr Ratio (Qtr) 2.41 4.12
Debt to Equity Ratio Debt/Equity (Qtr) 0.88 0.92
Interest Cover Ratio Int Coverage (Qtr) 0.08 30.46
Times Interest Earned Times Interest Earned (Qtr) 0.08 30.46
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) 12.00 -33.89
EBIT Margin % EBIT Margin % (Qtr) 0.45 -43.32
EBT Margin % EBT Margin % (Qtr) -5.44 -44.88
Gross Margin % Gross Margin % (Qtr) 25.30 39.81
Net Profit Margin % Net Margin % (Qtr) -4.30 -41.60