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TFF Group (ENXTPA:TFF) Margin Compression To 6.4% Tests Bullish Earnings Growth Narrative

Simply Wall St · 4d ago

Latest Half-Year Results Set the Stage for TFF Group

TFF Group (ENXTPA:TFF) has just reported its H1 2026 results, with recent half-year revenue figures ranging from €185.2m to €240.2m and basic EPS between €0.37 and €1.05. Trailing twelve month revenue stands at €366.1m with net income of €23.3m. The company’s revenue moved from €222.3m and basic EPS of €0.79 in H2 2024 to €240.2m and €1.05 in H1 2025, then to €185.2m and €0.37 in H2 2025. This creates a mixed earnings backdrop where investors may focus on how recent margin compression interacts with expectations for stronger earnings growth.

See our full analysis for TFF Group.

With the headline numbers on the table, the next step is to see how this earnings profile lines up with the widely followed narratives about growth potential, risk, and quality of the business.

Curious how numbers become stories that shape markets? Explore Community Narratives

ENXTPA:TFF Earnings & Revenue History as at Jan 2026
ENXTPA:TFF Earnings & Revenue History as at Jan 2026

Margins Under Pressure at 6.4%

  • Over the last twelve months, TFF Group converted €366.1m of revenue into €23.3m of net income, which works out to a 6.4% net margin compared with 8.6% a year earlier.
  • What stands out for a bullish view is that analysts are expecting earnings to grow 22.41% per year, yet recent halves show net income of €22.7m on €240.2m revenue in H1 2025 and €8.0m on €185.2m in H2 2025. Investors therefore need to reconcile those growth hopes with margins that have moved from 8.6% to 6.4% in the latest twelve month period.
    • Supporters of the bullish case can point to five year earnings growth of 7.7% per year alongside the 22.41% expected rate, which together suggest a history of growth plus higher forecasts.
    • At the same time, the step down in trailing profitability, with €23.3m of net income on €366.1m of revenue, challenges any bullish claim that recent earnings quality is already back in line with those stronger growth expectations.
To see how that margin picture fits into the wider long term story, many investors look at the full narrative and valuation checks for the company before making up their mind. 📊 Read the full TFF Group Consensus Narrative.

P/E Of 17.1x And DCF Gap

  • TFF’s trailing P/E of 17.1x sits above the 15.6x Global Packaging industry average but below a 35.6x peer average, while a DCF fair value of €44.11 compares with the current share price of €18.35.
  • Critics often focus on the risk that paying above the industry P/E could be rich. At the same time, the large gap between the €18.35 share price and the €44.11 DCF fair value, together with expected 22.41% annual earnings growth, sets up a tension between cautious and optimistic interpretations.
    • On one side, the higher than industry P/E of 17.1x supports a bearish concern that the market is already pricing in some quality or growth, despite the 6.4% net margin being lower than the previous 8.6% level.
    • On the other, the roughly 58.4% discount to the DCF fair value gives bulls a concrete figure to point to when they argue that the current valuation does not fully reflect the past five year earnings growth rate of 7.7% per year or the higher forward growth expectations.

Cash Flow Strain Versus Dividend And Debt

  • The dividend yield of 2.72% is flagged as not well covered by free cash flow, and debt is described as not well covered by operating cash flow, so both shareholder payouts and borrowing costs are leaning on cash generation that looks tight.
  • Bears argue that weak coverage of both dividend and debt makes the business more vulnerable if margins stay around the recent 6.4% level, and the data on poor operating cash coverage of debt and limited free cash flow coverage of the dividend directly backs that concern.
    • The combination of a 2.72% yield and poor free cash flow coverage means income focused investors have to watch not only earnings, but also actual cash coming in, which is what funds those payments.
    • Given that revenue is forecast to grow 3.7% per year versus 5.5% for the French market, bears see a risk that slower top line progress and thinner margins could keep that cash flow coverage under pressure unless the business improves its efficiency.

Next Steps

Don't just look at this quarter; the real story is in the long-term trend. We've done an in-depth analysis on TFF Group's growth and its valuation to see if today's price is a bargain. Add the company to your watchlist or portfolio now so you don't miss the next big move.

See What Else Is Out There

TFF Group’s tighter 6.4% net margin, weak cash coverage of both dividends and debt, and pressure on free cash flow highlight financial resilience as a key concern.

If you want businesses where balance sheets work harder for shareholders instead of the other way around, check out our solid balance sheet and fundamentals stocks screener (1941 results) today and focus on companies built with stronger financial footing.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.