EDAG Engineering (ED4) AI Stock Analysis

• Market Cap: €173.00M
• Dividend Yield: 7.95%
• Average Volume (3M): 8.75K
• Price to Earnings (P/E): 8.2
• Beta (1Y): 0.09
• Revenue Growth: -10.93%
• EPS Growth: -238.05%
• Country: DE
• Employees: 9,133
• Sector: Consumer Cyclical
• Sector Strength: 75
• Industry: Auto - Parts
• EPS (TTM): -0.37
• Shares Outstanding: 25,000,000
• 10 Day Avg. Volume: 5,493
• 30 Day Avg. Volume: 8,753
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• 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: €8.00
• Price Target Upside: 16.28% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 2

• Rating: 55 Neutral
• Price Target: €7.00 ▲(1.74% Upside)

The overall stock score of 55 reflects significant financial challenges, particularly in profitability and leverage, despite strong technical indicators suggesting positive market momentum. The high dividend yield is a positive aspect but is overshadowed by the negative P/E ratio.

Positive Factors

Strong Gross Margins

The strong gross margins indicate effective cost management, allowing EDAG Engineering to maintain a competitive edge in pricing and profitability potential despite other financial challenges.

Stable Revenue Streams

Long-term partnerships with OEMs provide stable revenue streams, enhancing financial predictability and resilience against market fluctuations, supporting strategic planning and investment.

High Dividend Yield

A high dividend yield can attract income-focused investors, providing a buffer against stock price volatility and supporting shareholder returns, even amid profitability challenges.

Negative Factors

High Leverage

High leverage poses financial stability risks, potentially limiting EDAG's ability to invest in growth opportunities and increasing vulnerability to interest rate changes.

Negative Revenue Growth

Declining revenue growth suggests challenges in market expansion and competitiveness, potentially impacting long-term financial health and market position.

Declining Free Cash Flow

Reduced free cash flow growth limits EDAG's ability to fund operations, invest in new projects, and return capital to shareholders, affecting long-term sustainability.

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 Engineering generates revenue primarily through project-based contracts with automotive manufacturers and suppliers, providing engineering services throughout the vehicle development lifecycle. Key revenue streams include design and engineering services, consulting on production processes, and software solutions for automotive applications. The company also engages in long-term partnerships with major automotive OEMs (Original Equipment Manufacturers), which provide a stable income source through ongoing contracts. Additionally, EDAG may earn revenue from technology licensing and collaborative projects with other firms in the mobility sector, enhancing its market position and financial stability.

EDAG Engineering Financial Statement Overview

Summary

The company shows strong gross profit margins and positive cash flows, yet declining revenues and negative income figures indicate substantial profitability challenges. Increased leverage further highlights the need for improved financial stability.

Income Statement

The income statement reveals declining revenues from 2023 to the TTM period, accompanied by negative net income and EBIT margins, indicating challenges in profitability. However, the company maintains a strong gross profit margin, suggesting some efficiency in covering direct costs.

Balance Sheet

The balance sheet shows a stable equity ratio around 18% and a manageable debt-to-equity ratio, although leverage has increased over the years. The return on equity has turned negative in the TTM period due to negative net income, highlighting profitability challenges.

Cash Flow

Cash flow analysis is relatively strong with positive free cash flow and operating cash flow, although there is a decline in free cash flow from 2024 to the TTM period. The company maintains a solid operating cash flow to net income ratio, indicating effective cash generation relative to earnings.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	766.19M	821.91M	844.78M	821.92M	710.09M	653.46M
Gross Profit	679.82M	728.56M	746.28M	707.25M	622.69M	569.87M
EBITDA	16.68M	47.55M	98.28M	91.23M	65.74M	24.64M
Net Income	-35.07M	-14.36M	28.90M	28.86M	11.42M	-23.40M
Balance Sheet
Total Assets	700.26M	734.15M	730.58M	721.66M	694.22M	620.08M
Cash, Cash Equivalents and Short-Term Investments	97.05M	125.50M	107.29M	122.72M	151.23M	156.32M
Total Debt	195.38M	344.98M	342.70M	321.45M	285.96M	260.54M
Total Liabilities	578.52M	601.09M	568.05M	572.74M	578.80M	518.24M
Stockholders Equity	121.59M	132.88M	162.53M	148.92M	115.42M	101.84M
Cash Flow
Free Cash Flow	45.53M	71.21M	10.55M	3.92M	4.86M	134.39M
Operating Cash Flow	61.29M	94.08M	40.74M	34.00M	23.59M	150.11M
Investing Cash Flow	-16.91M	-23.95M	-29.78M	-29.72M	-18.37M	-15.49M
Financing Cash Flow	-36.90M	-51.58M	-26.27M	-33.03M	-10.55M	-47.17M

EDAG Engineering Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 6.88
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For DE:ED4, the sentiment is Positive. The current price of 6.88 is above the 20-day moving average (MA) of 6.82, above the 50-day MA of 6.34, and above the 200-day MA of 6.47, indicating a bullish trend. The MACD of 0.17 indicates Positive momentum. The RSI at 60.55 is Neutral, neither overbought nor oversold. The STOCH value of 24.55 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for DE:ED4.

EDAG Engineering Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
Sector *	61 Neutral	$17.83B	12.89	-1.60%	3.03%	1.39%	-14.45%
ED4	55 Neutral	€173.00M	8.20	-24.96%	7.95%	-10.93%	-238.05%
0NYZ	―	€189.78M	―	-26.01%	―	―	―
0MG5	―	€293.04M	―	-23.03%	―	―	―
0OQX	―	€91.64M	―	-16.40%	―	―	―
0NHL	―	€88.13M	7.93	7.01%	―	―	―
NVM	55 Neutral	€162.65M	6.58	26.85%	8.87%	-11.68%	4.45%