Atlas Copco (ATLKY) AI Stock Analysis

• Market Cap: $91.11B
• Dividend Yield: 1.29%
• Average Volume (3M): 236.98K
• Price to Earnings (P/E): 32.4
• Beta (1Y): 1.29
• Revenue Growth: 1.46%
• EPS Growth: -0.30%
• Country: US
• Employees: 55,248
• Sector: Industrials
• Sector Strength: 72
• Industry: Industrial - Machinery
• EPS (TTM): 0.15
• Shares Outstanding: 3,357,576,400
• 10 Day Avg. Volume: 150,950
• 30 Day Avg. Volume: 236,980
• PEG Ratio: -1.96
• Price to Book (P/B): 7.29
• Price to Sales (P/S): 5.08
• P/FCF Ratio: 30.24
• Enterprise Value/Market Cap: 9.78
• Enterprise Value/Revenue: 5.63
• Enterprise Value/Gross Profit: 13.12
• Enterprise Value/Ebitda: 21.71
• 1Y Price Target: N/A
• Price Target Upside: N/A
• Rating Consensus: N/A
• Number of Analyst Covering: 0
• EPS Forecast (FY): 0.67
• Revenue Forecast (FY): $19.52B

• Rating: 75 Outperform
• Price Target: $21.50 ▲(30.15% Upside)
• Action: Reiterated Date: 02/27/26
• Date: Action: Reiterated 02/27/26

The score is driven primarily by strong underlying profitability, solid returns, and consistent free cash flow generation, supported by a favorable technical uptrend. Offsetting this is a premium valuation (high P/E with a modest yield) and recent 2025 revenue and cash-flow slowdown that raises cyclical demand risk.

Positive Factors

Recurring aftermarket & services

A sizable aftermarket and service business creates a durable revenue base and higher margins versus one-time equipment sales. Recurring contracts, spare parts and maintenance drive predictable cash flows, raise lifetime customer value and reduce sensitivity to new-capex swings.

High margins and returns

Consistently strong gross and EBIT margins plus high ROE reflect durable pricing power, operational efficiency and product differentiation. These margins support sustainable profitability through cycles, enabling reinvestment, R&D and service expansion that reinforce competitive advantage.

Strong cash generation and capital structure

High free-cash-flow conversion and a moderate, declining debt-to-equity ratio provide financial flexibility. Reliable cash generation funds maintenance capex, services growth and dividends, and cushions investment during downturns without materially weakening the balance sheet.

Negative Factors

2025 revenue and FCF decline

A simultaneous drop in revenue and free cash flow signals meaningful cyclical sensitivity. If this weaker momentum persists, it can erode reinvestment capacity, pressure margins through lower fixed-cost absorption, and constrain the company’s ability to expand services or fund strategic projects.

Exposure to cyclical end-markets

Significant exposure to capital-intensive sectors makes equipment demand volatile across cycles. New-equipment sales can swing with industrial capex, creating revenue and working-capital volatility that can persist for multiple quarters and complicate long-term planning and investment.

Easing returns and slowing growth momentum

Returns and growth have softened from prior peaks, with EPS growth negative while revenue growth is modest. Easing returns reduce internal funding capacity and can limit strategic initiatives; sustained deceleration would challenge the company’s ability to maintain past investment and margin levels.

Atlas Copco Business Overview & Revenue Model

Company Description

Atlas Copco AB, together with its subsidiaries, provides productivity solutions. The company operates through Compressor Technique, Vacuum Technique, Industrial Technique, and Power Technique segments. It offers piston compressors, oil-free tooth and scroll compressors, rotary screw compressors, oil-free blowers, oil-free centrifugal compressors, gas and process compressors, air and gas treatment equipment, and medical air solutions primarily for use in the manufacturing and process industries. The company also provides oil-sealed rotary vane, dry, and liquid ring vacuum pumps; and turbomolecular and cryogenic pumps, as well as abatement and integrated systems for the semiconductor and scientific, chemical process, food packaging, and paper handling industries. In addition, it offers pneumatic, hydraulic, and electric assembly tools, as well as control systems and associated software for safety-critical tightening; self-pierce riveting tools, dispensing equipment for adhesives and sealants, and flow drill fastening equipment; material removal tools, drills, and other pneumatic products; and machine vision solutions for customers in the automotive and general industries. Further, the company provides portable compressors, boosters, generators, lighting towers, pumps, and construction and demolition tools for civil engineering, oil and gas, construction, manufacturing, exploration drilling, and demolition industries, as well as specialty rental services. It operates in North America, South America, Europe, Africa, the Middle East, Asia, and Oceania. The company was founded in 1873 and is headquartered in Nacka, Sweden.

How the Company Makes Money

Atlas Copco primarily makes money through a mix of equipment sales and aftermarket/service revenue across its business areas. (1) Equipment sales: The company sells industrial compressors (including air and gas compressors) along with air treatment and management systems; vacuum pumps and vacuum solutions used in industrial and scientific applications (including semiconductor and electronics-related manufacturing); industrial power tools, tightening systems, and assembly solutions used to improve production efficiency and quality; and portable power and flow equipment such as mobile compressors, generators, pumps, and related accessories. Revenue is recognized from these product sales through direct sales forces, distributors, and/or channel partners depending on geography and product line (specific partner names not consistently disclosed at the group level; null). (2) Aftermarket and services: A major driver of earnings is recurring revenue from service contracts, spare parts, consumables, maintenance, overhauls, repairs, and upgrades across the installed base of Atlas Copco equipment. This lifecycle business can provide more stable and typically higher-margin revenue than new equipment sales, and it benefits from the long operating life and critical nature of the equipment in customer operations. (3) Systems and solutions: In addition to standalone products, Atlas Copco generates revenue from engineered solutions, integration, and project-based deliveries (e.g., compressor systems, vacuum installations, or assembly-line solutions), often bundled with commissioning and ongoing service. (4) Cyclicality and end-market mix: Earnings are influenced by industrial production levels and capital expenditure cycles (affecting new equipment demand), while the large installed base supports recurring service demand. Exposure to sectors such as manufacturing, construction, process industries, and electronics/semiconductors can materially affect growth and profitability depending on cycle conditions. (5) Pricing, innovation, and efficiency: Differentiation through energy-efficient equipment, reliability, digital monitoring/connected services, and productivity-enhancing tools supports pricing power and service attachment, which in turn contributes to margins and cash generation. Significant partnerships specifically driving earnings at the group level are not publicly itemized in a consistent way; null.

Atlas Copco Financial Statement Overview

Summary

High-quality profitability and returns (gross margin ~41%–44%, EBIT margin ~19%–22%, ROE ~23%–31%) supported by consistently positive free cash flow. The key drag is weakening momentum in 2025: revenue declined (-7.4%) and free cash flow fell (-11.7%), indicating a cyclical slowdown risk.

Income Statement

Atlas Copco shows strong, durable profitability with consistently high gross margins (~41%–44%) and healthy operating profitability (EBIT margin ~19%–22%) across the period. Net margins are also solid (~15%–17%), supporting quality earnings. The key weakness is the growth trajectory: after strong expansion in 2021–2023, revenue turned slightly positive in 2024 and then declined in 2025 (-7.4%), alongside lower earnings versus 2024—suggesting a cyclical slowdown or softer end-market demand.

Balance Sheet

The balance sheet looks sound with moderate leverage and improving capital structure: debt-to-equity is low-to-moderate (~0.31–0.36 recently, down from ~0.45–0.46 earlier), indicating financial flexibility. Returns on equity are consistently strong (~23%–31%), reflecting efficient capital use. The main watch item is that returns have eased from peak levels (2023 to 2025), and debt levels remain sizable in absolute terms—so maintaining profitability through the cycle is important.

Cash Flow

Cash generation is strong with consistently positive free cash flow and good conversion versus accounting earnings (free cash flow running at ~76%–87% of net income). However, cash flow momentum weakened in 2025 with free cash flow down (-11.7%) after growth in 2023–2024. Operating cash flow coverage is moderate (~0.35–0.71 over time and ~0.55 in 2025), indicating cash conversion can fluctuate year to year, likely reflecting working-capital swings.

Breakdown	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	158.24B	176.77B	172.66B	141.32B	110.91B
Gross Profit	67.88B	75.74B	75.12B	59.38B	46.53B
EBITDA	41.02B	47.50B	45.12B	36.14B	28.69B
Net Income	24.83B	29.78B	28.04B	23.48B	18.13B
Balance Sheet
Total Assets	202.46B	208.54B	182.68B	172.30B	136.68B
Cash, Cash Equivalents and Short-Term Investments	16.13B	19.33B	11.22B	11.85B	19.58B
Total Debt	34.90B	34.71B	32.71B	36.30B	24.85B
Total Liabilities	92.07B	94.78B	91.18B	92.28B	69.05B
Stockholders Equity	110.21B	113.70B	91.45B	79.98B	67.63B
Cash Flow
Free Cash Flow	26.58B	30.86B	22.63B	16.35B	19.79B
Operating Cash Flow	30.61B	36.89B	28.08B	21.38B	23.15B
Investing Cash Flow	-16.56B	-13.32B	-9.39B	-15.50B	-6.12B
Financing Cash Flow	-15.39B	-15.86B	-18.28B	-14.65B	-10.32B

Atlas Copco Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 16.52
• 50DMA: Negative
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ATLKY, the sentiment is Negative. The current price of 16.52 is below the 20-day moving average (MA) of 21.02, below the 50-day MA of 20.38, and below the 200-day MA of 17.50, indicating a neutral trend. The MACD of -0.27 indicates Positive momentum. The RSI at 30.71 is Neutral, neither overbought nor oversold. The STOCH value of 14.36 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for ATLKY.

Atlas Copco Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
PH	80 Outperform	$119.95B	32.82	25.65%	0.79%	0.22%	26.66%
ATLKY	75 Outperform	$91.11B	32.37	24.26%	1.29%	1.46%	-0.30%
ITW	72 Outperform	$78.76B	23.48	95.18%	2.43%	-0.41%	-10.88%
IR	70 Outperform	$33.84B	54.24	5.70%	0.10%	4.20%	-34.47%
EMR	69 Neutral	$78.78B	30.81	11.61%	1.58%	2.97%	18.14%
ROK	68 Neutral	$42.03B	35.94	27.69%	1.33%	0.98%	-7.51%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%