EDAG Engineering (ED4) AI Stock Analysis

• Market Cap: €94.25M
• Dividend Yield: 10.96%
• Average Volume (3M): 6.01K
• Price to Earnings (P/E): ―
• Beta (1Y): 0.19
• Revenue Growth: -13.53%
• EPS Growth: -394.79%
• Country: DE
• Employees: 9,133
• Sector: Consumer Cyclical
• Sector Strength: 84
• Industry: Auto - Parts
• EPS (TTM): -0.87
• Shares Outstanding: 25,000,000
• 10 Day Avg. Volume: 4,222
• 30 Day Avg. Volume: 6,015
• PEG Ratio: 0.08
• Price to Book (P/B): 1.32
• Price to Sales (P/S): 0.21
• P/FCF Ratio: 2.47
• 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: N/A
• Price Target Upside: N/A
• Rating Consensus: N/A
• Number of Analyst Covering: 0
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 42 Neutral
• Price Target: €3.50 ▼(-29.44% Downside)

The score is driven primarily by weak financial performance (declining revenue, losses, and high leverage) and very poor technical momentum (price far below major moving averages with deeply oversold readings). Valuation does not offset these risks because the negative P/E reflects ongoing losses and there is no indicated dividend support.

Positive Factors

Project-based engineering services (recurring client work)

EDAG's project-based engineering and consulting model creates recurring, contract-driven revenues from OEMs and suppliers. This service-led structure supports steady demand for expertise over multi-month projects, enabling predictable utilization and long-term client relationships in automotive engineering.

Exposure to EV, autonomy, and digitalization trends

The company's strategic focus on electric/hybrid powertrains, autonomous systems, and digital production aligns with multi-year structural shifts in automotive R&D. This positions EDAG to capture growing engineering spend as OEMs outsource complex electrification and software integration work.

High gross profit margin at product/service level

An 88.73% gross margin indicates strong markup on core engineering services and prototype work, giving EDAG structural capacity to cover fixed costs and fund R&D. If revenue stabilizes, strong gross margins support recovery in operating profitability over several quarters.

Negative Factors

Declining revenue trend

Sustained revenue declines reduce scale needed to absorb fixed overhead in engineering operations. Lower project volumes compress utilization and increase per-project SG&A burden, making margin recovery and reinvestment more difficult absent renewed contract wins or market share gains.

High leverage and weak equity base

A debt-to-equity ratio of 1.61 signals material leverage, increasing interest and refinancing risk. High leverage limits strategic flexibility for investments or downturns, and with negative ROE, debt amplifies downside risk if operating performance doesn't improve within the next several quarters.

Weak cash conversion and sharply falling FCF

A >50% drop in free cash flow growth and low operating cash flow to net income ratio indicate difficulty converting earnings into cash. This constrains funding for capex, R&D, or dividends and raises reliance on external financing during a multi-quarter recovery.

EDAG Engineering Business Overview & Revenue Model

Company Description

EDAG Engineering Group AG engages in the development of vehicles, derivatives, modules, and production facilities for the automotive and commercial vehicle industries worldwide. It operates through three segments: Vehicle Engineering, Production Solutions, and Electrics/Electronics. The Vehicle Engineering segment provides package and ergonomics, body assembly, surface design, and interior and exterior services; develops commercial vehicles, doors, covers, and lid systems, as well as head, rear, and small lamps; and technologies and lightweight designing services. This segment also offers vehicle integration services comprising functional integration and vehicle validation services, such as testing of individual components, modules, engines, motors, transmissions, and complete vehicles; models and vehicle solutions, including a range of styling, ideation, and design services, as well as creates test vehicles, sub-assemblies, and vehicle bodies for the physical validation of modules and systems; project management; and consulting and support services for quality-related matters. The Production Solutions segment provides body manufacturing and smart factory services, product design for manufacturability, coordinated technical building equipment and plant layout, individual production solutions, networking through smart logistics, digitalization, and networking in production; and process consulting and CAx development services, as well as consulting, conceptual, and realization services. The Electrics/Electronics segment develops electric and electronic systems comprising architecture and networks development, systems engineering, embedded systems, information technology, integration and system validation, functional safety and cyber security, and process and product data management services. The company was founded in 1969 and is based in Arbon, Switzerland. EDAG Engineering Group AG is a subsidiary of Aton Austria Holding GmbH.

How the Company Makes Money

EDAG makes money primarily through its engineering and consulting services provided to automotive manufacturers and suppliers. The company's revenue model is based on project-based contracts, where it earns fees for its expertise in vehicle development and related engineering services. Key revenue streams include design and development projects, prototype construction, and advisory services for manufacturing processes. Additionally, EDAG has formed strategic partnerships with various automotive companies and technology firms, enhancing its service offerings and expanding its market reach, which contributes significantly to its earnings.

EDAG Engineering Financial Statement Overview

Summary

Weak fundamentals: revenues are declining (-3.14% TTM), profitability is negative (net and EBIT margins negative), and leverage is high (debt-to-equity 1.61) with negative ROE. Cash generation is mixed, with sharply lower free cash flow growth (-51.91%) but some stability in free cash flow relative to net losses.

Income Statement

EDAG Engineering's income statement shows a declining revenue trend with a negative revenue growth rate of -3.14% in the TTM period. The company is experiencing negative net profit margins, indicating losses, and EBIT margins have also turned negative. Despite a strong gross profit margin of 88.73%, the overall profitability is weak due to high operating expenses and declining revenues.

Balance Sheet

The balance sheet reveals a high debt-to-equity ratio of 1.61 in the TTM period, indicating significant leverage and potential financial risk. The return on equity is negative, reflecting the company's inability to generate profit from shareholders' equity. The equity ratio is low, suggesting a heavy reliance on debt financing.

Cash Flow

Cash flow analysis shows a significant decline in free cash flow growth by -51.91% in the TTM period. The operating cash flow to net income ratio is low, indicating challenges in converting income into cash. However, the free cash flow to net income ratio remains relatively stable, suggesting some ability to generate cash despite net losses.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	742.16M	821.91M	844.78M	821.92M	710.09M	653.46M
Gross Profit	653.17M	728.56M	746.28M	707.25M	622.69M	569.87M
EBITDA	-22.17M	47.55M	99.48M	91.23M	66.34M	24.64M
Net Income	-61.92M	-14.36M	28.90M	28.86M	11.42M	-23.40M
Balance Sheet
Total Assets	657.30M	734.15M	730.58M	721.66M	694.22M	620.08M
Cash, Cash Equivalents and Short-Term Investments	47.89M	125.50M	107.29M	122.72M	151.23M	156.32M
Total Debt	192.32M	344.98M	342.70M	321.45M	285.96M	260.54M
Total Liabilities	557.07M	601.09M	568.05M	572.74M	578.80M	518.24M
Stockholders Equity	100.12M	132.88M	162.53M	148.92M	115.42M	101.84M
Cash Flow
Free Cash Flow	21.89M	71.21M	10.55M	3.92M	4.86M	134.39M
Operating Cash Flow	33.56M	94.08M	40.74M	34.00M	23.59M	150.11M
Investing Cash Flow	-12.92M	-23.95M	-29.78M	-29.72M	-18.37M	-15.49M
Financing Cash Flow	-75.12M	-51.58M	-26.27M	-33.03M	-10.55M	-47.17M

EDAG Engineering Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 4.96
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Positive
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For DE:ED4, the sentiment is Negative. The current price of 4.96 is above the 20-day moving average (MA) of 4.26, below the 50-day MA of 5.08, and below the 200-day MA of 6.06, indicating a bearish trend. The MACD of -0.41 indicates Negative momentum. The RSI at 28.38 is Positive, neither overbought nor oversold. The STOCH value of 43.37 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for DE:ED4.

EDAG Engineering Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
PWO	72 Outperform	€83.75M	7.26	7.17%	5.91%	-4.01%	-10.36%
Sector *	61 Neutral	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%
NVM	59 Neutral	€133.39M	7.28	19.67%	―	-9.08%	-34.48%
ZIL2	46 Neutral	€269.91M	-2.31	-16.55%	3.51%	-6.21%	-995.53%
GMM	46 Neutral	€96.85M	6.48	9.81%	―	-10.08%	―
BDT	45 Neutral	€194.23M	-3.57	-16.04%	1.38%	-17.63%	30.27%
ED4	42 Neutral	€94.25M	-1.54	-47.18%	10.96%	-13.53%	-394.79%