Assa Abloy (ASAZY) AI Stock Analysis

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Assa Abloy

(OTC:ASAZY)

70Outperform

Assa Abloy's overall score of 70 reflects its strong financial performance and effective cash flow management, combined with a solid balance sheet. However, technical analysis indicates moderate momentum, and valuation suggests the stock is fairly priced. The mixed sentiment from the earnings call, highlighting strong financial results but challenges in organic sales, particularly in APAC and the residential market, also factors into the score.

Assa Abloy (ASAZY) vs. S&P 500 (SPY)

Market Cap

$32.24B

Dividend Yield1%

Average Volume (3M)20.08K

Price to Earnings (P/E)21.7

Beta (1Y)0.88

Revenue Growth7.17%

EPS Growth15.22%

CountryUS

Employees63,000

SectorIndustrials

Sector Strength70

IndustrySecurity & Protection Services

Share Statistics

EPS (TTM)0.67

Shares Outstanding2,110,100,000

10 Day Avg. Volume60,253

30 Day Avg. Volume20,084

Financial Highlights & Ratios

PEG Ratio1.43

Price to Book (P/B)N/A

Price to Sales (P/S)2.24

Price to Cash Flow (P/CF)N/A

P/FCF Ratio0.00

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price TargetN/A

Price Target UpsideN/A

Rating ConsensusN/A

Number of Analyst Covering0

Assa Abloy Business Overview & Revenue Model

Company DescriptionAssa Abloy AB is a global leader in access solutions, specializing in the design, manufacturing, and distribution of locking systems, entrance automation, and related services. The company operates across various sectors, including commercial, institutional, and residential markets, offering a comprehensive range of products such as mechanical locks, electromechanical locks, security doors, and entrance automation systems. With its headquarters in Stockholm, Sweden, Assa Abloy serves customers worldwide, providing innovative and secure solutions to meet contemporary security needs.

How the Company Makes MoneyAssa Abloy makes money through the sale of its diverse range of security and access solutions. The company's revenue model primarily revolves around the direct sales of its hardware products, such as locks, doors, and access control systems, to various verticals including commercial, institutional, and residential markets. In addition to product sales, Assa Abloy generates revenue from services related to installation, maintenance, and support of its security systems. The company also benefits from strategic acquisitions and partnerships that enhance its product offerings and expand its market reach, contributing significantly to its earnings. Furthermore, Assa Abloy invests in research and development to innovate and tailor solutions that meet evolving market demands, thereby sustaining its revenue growth.

Assa Abloy Financial Statement Overview

Summary

Assa Abloy demonstrates strong financial performance with solid revenue and profitability growth, efficient cost management, and robust cash flow generation. The balance sheet is stable with manageable leverage and a strong capital structure.

Income Statement

Very Positive

Assa Abloy demonstrates a strong financial performance with a consistent increase in revenue and profitability. Gross profit margin improved to 41.76%, reflecting efficient cost management. The net profit margin is robust at 10.41%, indicating stable profitability. Revenue growth rate of 6.70% shows healthy expansion. EBIT and EBITDA margins strengthen further to 16.16% and 19.87%, respectively, showcasing operational efficiency.

Balance Sheet

Positive

The company maintains a solid balance sheet with a debt-to-equity ratio of 0.69, suggesting manageable leverage. ROE is impressive at 14.61%, reflecting efficient use of equity. The equity ratio is substantial at 47.91%, indicating a strong capital structure. The balance sheet highlights a good balance between growth and financial stability.

Cash Flow

Positive

Cash flow analysis reveals strong operational cash flow with an operating cash flow to net income ratio of 1.37, highlighting effective cash generation. Free cash flow to net income ratio is stable at 1.24, indicating healthy cash surplus. Free cash flow growth rate of 3.61% reflects ongoing investments and expansion capacity.

TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
105.61B	150.16B	140.72B	120.79B	95.01B	87.65B
	Gross Profit
41.72B	62.73B	56.50B	47.93B	37.78B	34.31B
	EBIT
15.81B	24.27B	21.79B	18.53B	14.18B	12.46B
	EBITDA
19.93B	29.85B	26.95B	22.53B	18.02B	16.20B
	Net Income Common Stockholders
11.45B	15.64B	13.63B	13.29B	10.90B	9.17B
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
4.50B	4.50B	1.70B	3.42B	4.33B	2.80B
	Total Assets
223.60B	223.60B	196.35B	154.56B	129.97B	117.43B
	Total Debt
73.50B	73.50B	65.19B	33.73B	28.75B	29.46B
	Net Debt
69.00B	69.00B	63.73B	30.32B	24.43B	26.70B
	Total Liabilities
116.52B	116.52B	104.71B	68.54B	60.38B	58.55B
	Stockholders Equity
107.07B	107.07B	91.63B	86.01B	69.58B	58.87B
Cash Flow		Free Cash Flow
8.78B	19.33B	18.66B	12.36B	10.74B	11.85B
	Operating Cash Flow
10.56B	21.39B	21.29B	14.36B	12.46B	13.66B
	Investing Cash Flow
-5.50B	-13.93B	-47.90B	-10.56B	-3.09B	-6.74B
	Financing Cash Flow
-6.93B	-4.45B	24.73B	-4.70B	-7.81B	-4.56B

Assa Abloy Technical Analysis

Technical Analysis Sentiment

Negative

Last Price14.38

Price Trends

50DMA

15.11

Negative

100DMA

15.10

Negative

200DMA

15.24

Negative

Market Momentum

MACD

-0.35

Negative

RSI

47.46

Neutral

STOCH

85.11

Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ASAZY, the sentiment is Negative. The current price of 14.38 is below the 20-day moving average (MA) of 14.43, below the 50-day MA of 15.11, and below the 200-day MA of 15.24, indicating a bearish trend. The MACD of -0.35 indicates Negative momentum. The RSI at 47.46 is Neutral, neither overbought nor oversold. The STOCH value of 85.11 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for ASAZY.

Assa Abloy Peers Comparison

Overall Rating

UnderperformOutperform

Sector (63)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
ADT	78 Outperform	$6.83B	15.50	14.41%	2.74%	-13.19%	10.03%
BRC	74 Outperform	$3.27B	17.05	17.92%	1.39%	6.20%	5.12%
MSA	73 Outperform	$5.68B	20.07	27.01%	1.43%	1.15%	388.76%
BCO	71 Outperform	$3.79B	24.12	55.57%	1.11%	2.82%	95.64%
ASAZY	70 Outperform	$32.24B	21.72	15.74%	1.00%	7.17%	15.22%
ALLE	68 Neutral	$10.90B	18.52	42.39%	1.54%	3.33%	11.51%
Sector *	63 Neutral	$4.29B	11.05	5.73%	232.30%	4.75%	-5.69%

* Industrials Sector Average

Performance Comparison

ASAZY

Assa Abloy

14.38

0.55

3.98%

BRC

Brady

66.94

9.45

16.44%

BCO

Brink's Company

86.53

1.14

1.34%

MSA

MSA Safety

142.50

-41.26

-22.45%

ALLE

Allegion

125.13

1.22

0.98%

ADT

Adt

7.88

1.88

31.33%

Assa Abloy Earnings Call Summary

Earnings Call Date: Feb 5, 2025 | % Change Since: -5.46% | Next Earnings Date: Apr 23, 2025

Earnings Call Sentiment Neutral

The earnings call presented a mixed picture with strong financial performance and record-breaking achievements in operating income, acquisitions, and product launches. However, these positives were offset by organic sales challenges, particularly in the APAC region and the residential market. The company remains optimistic about certain segments and regions but acknowledges ongoing economic uncertainties.

Highlights

Record Operating Income and Cash Flow

Operating income reached a record high of SEK6.5 billion with strong cash conversion of 141% in Q4 and SEK8 billion in cash flow for the quarter.

Acquisition Success

The company completed eight acquisitions in Q4 and 26 in the full year, setting a new record, contributing to a 6% growth through acquisitions.

Global Tech Segment Performance

Global Tech saw a 5% organic sales growth with an operating margin of 19.3%, driven by strong performance in HID and Global Solutions.

New Product Launches

The company launched over 550 new products in 2024, marking a record year for product innovation.

Lowlights

Organic Sales Decline

Organic sales declined by 0.3%, with significant sales declines in APAC and Entrance Systems.

APAC Region Challenges

APAC experienced an 11% organic sales decline, with severe declines in China and Southeast Asia.

Residential Market Weakness

Continued challenging market conditions on the residential side, particularly affecting the logistics vertical in Entrance Systems.

Europe Sales Decline

Sales in Europe declined by 2%, with lower activity on the residential side despite strong commercial activity.

Company Guidance

In the fiscal year-end report for 2024, ASSA ABLOY presented a stable organic sales development with a slight decline of 0.3%, while acquisition growth contributed a robust 6% and currency effects added 1%, resulting in a 7% increase in top-line revenue to SEK40 billion. The company reported a strong operating margin of 16.5% and a record operating income of approximately SEK6.5 billion. Cash conversion was notably high at 141% for the quarter and 110% for the full year, with cash flow reaching SEK8 billion. ASSA ABLOY completed eight acquisitions in the quarter and 26 for the year, setting a new record. Regionally, North America experienced a 1% organic growth, while South America achieved an 8% increase. Europe saw a 2% decline, and Asia Pacific faced an 11% drop. The company continued to focus on innovation, launching over 550 new products in 2024. Moving forward, ASSA ABLOY aims to address the challenging organic growth environment while leveraging acquisition strategies to sustain growth.

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.