Harvey Norman Holdings Ltd (HVN) AI Stock Analysis

• Market Cap: $6.80B
• Dividend Yield: 4.48%
• Average Volume (3M): 1.36M
• Price to Earnings (P/E): 15.8
• Beta (1Y): 1.12
• Revenue Growth: 1.77%
• EPS Growth: 15.57%
• Country: AU
• Employees: 6,500
• Sector: Consumer Cyclical
• Sector Strength: 62
• Industry: Department Stores
• EPS (TTM): 0.17
• Shares Outstanding: 1,246,006,700
• 10 Day Avg. Volume: 1,384,765
• 30 Day Avg. Volume: 1,364,859
• PEG Ratio: 0.73
• Price to Book (P/B): 1.45
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 16.15
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $5.40
• Price Target Upside: -1.01% Downside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 1

• Rating: 73 Outperform
• Price Target: AU$6.00 ▲(9.89%Upside)

The overall stock score for Harvey Norman Holdings Ltd is primarily influenced by its strong financial stability and positive technical indicators. While the company faces challenges in profit margins and leverage, its effective cost management and robust cash flow generation are significant strengths. The fair valuation and attractive dividend yield further enhance the stock's investment appeal.

Positive Factors

Profit Growth

The company's 2H24 profit before tax increased by 5.0% year over year, which was 8% above the Goldman Sachs estimate.

Negative Factors

Market Competition

The company is experiencing market share loss in Australia due to higher competition in the electronics and furniture industry.

Sales Performance

The New Zealand retail segment delivered a -9.0% comparable sales decline in the second half of FY24.

Harvey Norman Holdings Ltd Business Overview & Revenue Model

Company Description

Harvey Norman Holdings Limited engages in the integrated retail, franchise, property, and digital system businesses. It franchises and sells products in various categories, including electrical goods, furniture, computerized communications, bedding and Manchester, kitchen and small appliances, bathroom and tiles, and carpets and floorings. As of June 30, 2022, the company operated 195 franchised complexes under the Harvey Norman, Domayne, and Joyce Mayne brands in Australia; and 109 company-operated stores under the Harvey Norman brand in New Zealand, Singapore, Malaysia, Slovenia, Croatia, Ireland, and Northern Ireland. It is also involved in the property investment and media placement activities; acts as a lessor of premises to Harvey Norman, Domayne, and Joyce Mayne franchisees and other third parties, as well as retail properties; development and sale of properties; and provision of consumer finance and other commercial loans and advances. The company was founded in 1982 and is based in Homebush West, Australia.

How the Company Makes Money

Harvey Norman Holdings Ltd generates revenue primarily through retail sales of a wide variety of consumer goods, such as electronics, home appliances, furniture, and bedding. The company's revenue model is bolstered by its franchise system, where independent franchisees operate stores under the Harvey Norman brand, paying franchise fees and contributing to the overall revenue. Additionally, the company benefits from property investments, earning rental income from leasing commercial premises to franchisees and other third-party tenants. The company's earnings are further enhanced by its strategic partnerships with leading manufacturers and suppliers, enabling it to offer a competitive and diverse product range while optimizing its supply chain efficiencies. Online sales also form a significant part of Harvey Norman's revenue stream, driven by its robust e-commerce platform that complements its physical store presence.

Harvey Norman Holdings Ltd Financial Statement Overview

Summary

Harvey Norman Holdings Ltd demonstrates overall financial stability with strong cash flow generation and a healthy equity base. The company faces challenges in maintaining profit margins and managing increasing leverage. While revenue growth is a concern, effective cost management and cash flow efficiency remain the company's strengths.

Income Statement

Harvey Norman Holdings Ltd has demonstrated a stable revenue base with a minor decline from the previous year, but overall, it has been consistent over the years. The gross profit margin is strong at approximately 46.5%, indicating good control over the cost of goods sold. The net profit margin decreased from last year to 8.98%, reflecting challenges in maintaining bottom-line profitability. The EBIT and EBITDA margins are solid, but there is a noticeable decrease in EBIT margin from the previous year, which might suggest increased operating expenses or lower revenue efficiency.

Balance Sheet

The company maintains a healthy equity ratio of around 56.8%, suggesting a strong foundation with moderate reliance on debt. However, the debt-to-equity ratio has increased slightly over the years to 0.51, indicating a growing leverage which could pose risks if not managed properly. The return on equity (ROE) has decreased to 7.83%, suggesting reduced profitability relative to shareholders' equity.

Cash Flow

Operating cash flow remains robust, and free cash flow is positive, indicating good internal cash generation capability. The free cash flow to net income ratio is strong, showing effective conversion of income into cash. However, the growth in free cash flow has been minimal, indicating stagnation in cash flow growth despite steady operating cash inflow.

Breakdown
TTM	Jun 2024	Jun 2023	Jun 2022	Jun 2021	Jun 2020
Income Statement		Total Revenue
2.82B	3.92B	3.98B	4.14B	4.15B	3.38B
	Gross Profit
868.88M	1.99B	1.94B	2.12B	2.16B	1.67B
	EBIT
-485.09M	361.21M	777.71M	970.32M	1.07B	675.90M
	EBITDA
755.74M	837.26M	1.02B	1.34B	1.37B	862.84M
	Net Income Common Stockholders
431.84M	352.45M	539.52M	811.53M	841.41M	480.54M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
314.23M	273.47M	218.75M	248.80M	305.71M	343.43M
	Total Assets
8.25B	7.93B	7.67B	7.25B	6.67B	5.83B
	Total Debt
2.27B	2.28B	2.18B	1.90B	1.74B	1.47B
	Net Debt
1.96B	2.01B	1.96B	1.66B	1.47B	1.16B
	Total Liabilities
3.54B	3.39B	3.21B	2.95B	2.78B	2.35B
	Stockholders Equity
4.67B	4.50B	4.43B	4.26B	3.86B	3.45B
Cash Flow		Free Cash Flow
417.29M	494.37M	492.60M	502.38M	443.57M	963.06M
	Operating Cash Flow
637.32M	686.53M	680.26M	597.30M	543.87M	1.06B
	Investing Cash Flow
-288.44M	-301.18M	-333.48M	-178.79M	-254.12M	-136.96M
	Financing Cash Flow
-376.82M	-334.25M	-379.07M	-432.87M	-335.47M	-811.37M

Harvey Norman Holdings Ltd Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 5.46
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For AU:HVN, the sentiment is Positive. The current price of 5.46 is above the 20-day moving average (MA) of 5.36, above the 50-day MA of 5.17, and above the 200-day MA of 4.82, indicating a bullish trend. The MACD of 0.06 indicates Negative momentum. The RSI at 60.93 is Neutral, neither overbought nor oversold. The STOCH value of 80.39 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for AU:HVN.

Harvey Norman Holdings Ltd Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
HVN	73 Outperform	$6.80B	15.75	9.58%	4.48%	1.77%	15.57%
Sector *	62 Neutral	$6.88B	11.32	2.90%	3.87%	2.70%	-24.57%
30M		€674.19M	21.54	8.55%	5.81%	―	―
JBH	75 Outperform	AU$11.92B	25.91	29.07%	3.24%	6.21%	0.20%
BLX	75 Outperform	AU$839.17M	28.08	17.54%	2.15%	5.33%	-4.25%
SUL	73 Outperform	AU$3.21B	14.18	17.52%	4.85%	2.56%	-13.62%
PMV	71 Outperform	AU$3.24B	16.35	14.01%	6.57%	-27.48%	-27.96%

Harvey Norman Holdings Ltd Corporate Events

Harvey Norman Reports Strong Half-Year Results

Harvey Norman Holdings Ltd has released its half-year results for the period ending December 31, 2024, highlighting strong performance across its integrated retail, franchise, property, and digital segments. The announcement underscores the company’s robust sales revenue and strategic positioning in both domestic and international markets, indicating positive implications for stakeholders and reinforcing its competitive standing in the industry.

Harvey Norman Reports Strong Profit Growth Amid Expansion

Harvey Norman Holdings Ltd reported a significant increase in profit before tax (PBT) for the first half of 2025, reaching $400.29 million, a 41.2% rise from the previous year. The company’s total system sales revenue amounted to $4.83 billion, with franchisee sales showing notable growth across several months. The strategic expansion into England has incurred substantial establishment costs, but the company continues to see positive sales trends in its key product categories.

Harvey Norman Holdings Announces Half-Year Results and Dividend Schedule

Harvey Norman Holdings Ltd has announced its half-year results for the period ending December 2024. The company has scheduled key dates for the announcement of its interim and final dividends for 2025, reflecting its ongoing commitment to shareholder returns. These announcements are crucial for stakeholders as they provide insights into the company’s financial health and future dividend payments, which are important indicators of its market position and operational performance.