Deutz AG (DEZ) AI Stock Analysis

• Market Cap: €1.67B
• Dividend Yield: 2.03%
• Average Volume (3M): 889.45K
• Price to Earnings (P/E): 41.0
• Beta (1Y): 1.59
• Revenue Growth: 9.79%
• EPS Growth: -31.93%
• Country: US
• Employees: 5,511
• Sector: Industrials
• Sector Strength: 72
• Industry: Industrial - Machinery
• EPS (TTM): 0.08
• Shares Outstanding: 152,638,100
• 10 Day Avg. Volume: 728,016
• 30 Day Avg. Volume: 889,447
• PEG Ratio: -0.25
• Price to Book (P/B): 0.63
• Price to Sales (P/S): 0.29
• P/FCF Ratio: 14.27
• 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: €10.75
• Price Target Upside: -1.47% Downside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 3
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 62 Neutral
• Price Target: €11.50 ▲(5.41% Upside)

The score is mainly driven by moderate financial performance (steady revenue growth and solid balance sheet, but weak margins and declining free-cash-flow growth). Technicals are supportive via a strong uptrend, yet overbought signals raise near-term risk. Valuation is the largest constraint due to the high P/E and only modest dividend yield.

Positive Factors

Recurring after‑sales and parts revenue

A diversified revenue mix including spare parts and after‑sales services creates recurring, higher‑sticky cash flows and reduces cycle sensitivity versus pure engine sales. This supports long‑term margin stability, stronger OEM relationships, and predictable service revenue over years.

Balanced leverage and solid equity base

Low net leverage and an almost 49% equity ratio provide financial flexibility to fund R&D, electrification and capex without excessive refinancing risk. This balance sheet strength improves resilience in downturns and supports multi‑year strategic investments.

Investment in sustainable powertrains

Active investment in hybrid and electric drive technologies aligns Deutz with long‑term regulatory and OEM shifts toward lower emissions. This structural focus positions the company to capture mandated technology upgrades and large OEM partnerships over multiple years.

Negative Factors

Very thin profitability margins

Sub‑2% net and ~1.2% EBIT margins leave limited room to absorb cost inflation or invest heavily without diluting returns. Persistently thin margins constrain free cash generation and make long‑term competitiveness dependent on sustained margin improvement or cost restructuring.

Declining free cash flow growth

A >25% drop in FCF growth weakens internal funding for capex, R&D and working capital, increasing reliance on external financing for strategic projects like electrification. Persistent FCF deterioration would pressure investment plans and dividend/return policies over the medium term.

Modest returns on equity

An ROE below 3% signals limited effectiveness in converting equity into profits, restricting shareholder value creation over time. Unless operating profitability and capital efficiency improve, ROE at this level suggests weak long‑term returns relative to peers and investment alternatives.

Deutz AG Business Overview & Revenue Model

Company Description

DEUTZ Aktiengesellschaft manufactures diesel and gas engines in Europe, the Middle East, Africa, the Asia Pacific, and the Americas. It operates through three segments: DEUTZ Compact Engines, DEUTZ Customized Solutions, and Other. The DEUTZ Compact Engines segment provides servicing of liquid-cooled engines with capacities of up to 8 liters. The DEUTZ Customized Solutions segment offers air-cooled drives and liquid-cooled engines with a capacity exceeding 8 liters; and reconditioned exchange engines and parts. The Other segment is involved in manufacturing electric and hybrid drive systems for marine applications under the Torqeedo brand; and development of battery management hardware and software products under the Futavis name, as well as focuses on the electrification of drive systems and electric-powered watercraft. The company also offers installation, maintenance, and repair services for engines. Its products are used in various applications, such as construction equipment, agricultural machinery, material handling equipment, ground support equipment, stationary equipment, commercial vehicles, rail vehicles, boats, and other applications. The company was founded in 1864 and is headquartered in Cologne, Germany.

How the Company Makes Money

Deutz AG generates revenue primarily through the sale of its engines and related components to OEMs (original equipment manufacturers) and end-users across its target industries. The company has established key revenue streams from the sale of new engines, spare parts, and after-sales services, which include maintenance and repair solutions. Additionally, Deutz benefits from strategic partnerships with manufacturers in various sectors, which help expand its market reach and enhance product development. The increasing demand for environmentally friendly solutions has also driven revenue growth through the introduction of innovative engine technologies that cater to evolving regulatory requirements and customer preferences.

Deutz AG Financial Statement Overview

Summary

Steady revenue growth (3.23% TTM) and balanced leverage (debt-to-equity 0.39) support stability, but profitability is thin (net margin 1.22%, EBIT margin 1.24%) and free cash flow growth declined (-25.48% TTM), which reduces the financial strength score.

Income Statement

Deutz AG's income statement shows a steady revenue growth rate of 3.23% TTM, indicating a positive trajectory. The gross profit margin of 21.33% and net profit margin of 1.22% TTM suggest moderate profitability, though the net margin is relatively low. The EBIT and EBITDA margins are 1.24% and 6.20% TTM, respectively, reflecting operational efficiency but also highlighting room for improvement in cost management.

Balance Sheet

The balance sheet reveals a debt-to-equity ratio of 0.39 TTM, indicating a balanced leverage position. The return on equity (ROE) is 2.88% TTM, which is modest and suggests limited returns to shareholders. The equity ratio stands at 48.91% TTM, showing a solid equity base relative to total assets, which enhances financial stability.

Cash Flow

Cash flow analysis indicates a decline in free cash flow growth by 25.48% TTM, which is a concern. The operating cash flow to net income ratio is 0.24 TTM, suggesting adequate cash generation relative to net income. The free cash flow to net income ratio is 0.56 TTM, indicating that a significant portion of net income is converted into free cash flow, though the decline in growth is a risk factor.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	2.01B	1.81B	2.06B	1.95B	1.62B	1.30B
Gross Profit	442.80M	400.80M	446.80M	360.80M	272.50M	185.00M
EBITDA	139.70M	138.10M	220.20M	194.90M	127.70M	-18.40M
Net Income	37.90M	51.80M	81.90M	80.20M	38.20M	-107.60M
Balance Sheet
Total Assets	1.93B	1.68B	1.59B	1.48B	1.29B	1.18B
Cash, Cash Equivalents and Short-Term Investments	66.70M	62.00M	90.10M	54.90M	36.10M	64.70M
Total Debt	335.90M	287.60M	253.50M	219.10M	115.80M	148.50M
Total Liabilities	982.80M	835.40M	847.00M	806.60M	701.70M	645.10M
Stockholders Equity	943.60M	847.90M	743.20M	668.80M	588.40M	535.20M
Cash Flow
Free Cash Flow	69.30M	37.50M	60.10M	-500.00K	31.60M	-31.00M
Operating Cash Flow	149.70M	101.70M	125.10M	57.70M	93.30M	44.90M
Investing Cash Flow	-212.40M	-171.90M	-97.90M	-67.20M	-67.20M	-76.20M
Financing Cash Flow	57.00M	41.30M	-4.60M	27.60M	-56.10M	41.50M

Deutz AG Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 10.91
• 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 DE:DEZ, the sentiment is Positive. The current price of 10.91 is above the 20-day moving average (MA) of 9.95, above the 50-day MA of 8.81, and above the 200-day MA of 8.27, indicating a bullish trend. The MACD of 0.63 indicates Negative momentum. The RSI at 68.94 is Neutral, neither overbought nor oversold. The STOCH value of 85.63 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for DE:DEZ.

Deutz AG Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
KSB3	77 Outperform	€1.82B	15.62	11.18%	2.84%	4.20%	-20.71%
KSB	76 Outperform	€1.82B	14.88	11.18%	2.76%	4.20%	-20.71%
JST	70 Outperform	€946.15M	32.56	8.47%	2.81%	21.74%	-20.68%
STM	68 Neutral	€460.41M	26.86	3.68%	5.57%	-0.75%	-67.10%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%
DEZ	62 Neutral	€1.67B	41.05	4.34%	2.03%	9.79%	-31.93%
DUE	54 Neutral	€1.62B	-50.65	-7.86%	3.12%	-18.21%	-137.62%