The FINEOS Corp Holdings PLC (ASX: FCL) share price is trending downwards this morning. As of 11am, the software company's share price is changing hands 0.76% lower at $2.63.
But over the year, the ASX All Ords company's share price has charged 61.35% higher, driven by a combination of good business performance and market sentiment.
For context, the ASX All Ordinaries Index (ASX: XJO) is 6.04% higher over the year to date.
FINEOS is a global software company which specialises in software solutions across the employee benefits, and life, accident, and health insurance industries. It has a strong focus on employee benefits, claims management, and policy administration. The business was founded in Ireland and now has offices in Australia, New Zealand, North America, and Europe.
In a recent note to investors, Macquarie Group Ltd (ASX: MQG) has weighed in on the stock. Here's what the broker has to say.
Macquarie's outlook on FINEOS shares
Macquarie has confirmed its outperform rating on FINEOS shares and upgraded its 12-month target price to $3.29, up from $2.45 previously.
This represents a potential 12-month upside of 25.1% from the time of writing.
New clients wins and a positive FCF
The broker cites FCF (free cash flow) performance and contract momentum for the upgrade.
FINEOS signed three new contracts in the June quarter.
"1) Two new North American clients contracted for FINEOS IDAM and FINEOS Claims. 2) An existing top-10 US group insurance client contracted FINEOS to conduct a major migration and consolidation of on-premises systems to FINEOS Absence (incl. integrated short-term disability claims)," Macquarie said in its note.
All projects are expected to 'Go Live' in the 2026 calendar year.
The ASX All Ords business also revealed robust FCF numbers in its latest update.
FCF, on a LTM basis, was €3 million for the June quarter.
"Positive FCF (LTM basis), despite June qtr cash receipts -3%, due to timing (1Q was +40%), and payments +9%. €17.5m 1H25 FCF, was up €11.4m vs 1H24," the broker said.
"Cash was down -€0.5m during the qtr, including currency -€1.5m. Operating Cashflow was €8.3m, offset by Investing Cashflow -€7.3m."
But the broker adds that "the opportunity, with potential upside risk to Macquarie expectations, continues to look attractive. In 2H25, FCL 'cycle' -€4.0m FCF in 3Q24 and -€10.5m in 4Q24."
