EDAG Engineering (ED4) AI Stock Analysis

• Market Cap: €170.00M
• Dividend Yield: 8.81%
• Average Volume (3M): 6.01K
• Price to Earnings (P/E): ―
• Beta (1Y): 0.11
• 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: Hold
• Number of Analyst Covering: 0
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 45 Neutral
• Price Target: €6.00 ▼(-3.85% Downside)

EDAG Engineering's overall stock score reflects significant financial performance challenges, including negative profitability and high leverage. Technical analysis indicates bearish momentum, with the stock trading below key moving averages and oversold conditions. The valuation is mixed, with a high dividend yield but negative P/E ratio. These factors combined result in a cautious outlook for the stock.

Positive Factors

Strong Gross Margins

High gross margins indicate effective cost management and pricing power, providing a buffer against revenue fluctuations and supporting long-term profitability.

Strategic Partnerships

Strategic partnerships enhance service offerings and expand market reach, potentially leading to increased revenue streams and competitive advantage.

Diverse Revenue Streams

A diverse revenue model with project-based contracts provides stability and reduces dependency on any single client or project, supporting long-term business resilience.

Negative Factors

High Leverage

High leverage increases financial risk and can strain cash flows, limiting the company's ability to invest in growth opportunities and affecting long-term stability.

Negative Profit Margins

Negative profit margins indicate challenges in achieving profitability, which can hinder reinvestment in the business and long-term financial health.

Declining Revenue Growth

Declining revenue growth suggests potential market share loss or demand issues, which could impact future earnings and competitive positioning.

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

EDAG Engineering faces challenges in revenue growth and profitability, with strong gross margins but negative net profit margins. The balance sheet shows high leverage, raising financial stability concerns. Cash flow generation is moderate, but declining free cash flow growth is a concern. Overall, the company needs to address profitability and leverage issues to improve its financial health.

Income Statement

EDAG Engineering's income statement shows a declining trend in revenue with a negative revenue growth rate of -3.36% TTM. The company has a high gross profit margin of 88.73% TTM, indicating strong cost management. However, the net profit margin is negative at -4.58% TTM, reflecting challenges in achieving profitability. The EBIT margin is also negative, suggesting operational inefficiencies. Overall, the income statement reflects strong gross margins but significant profitability challenges.

Balance Sheet

The balance sheet reveals a high debt-to-equity ratio of 1.61 TTM, indicating significant leverage and potential financial risk. Return on equity is negative at -25.51% TTM, highlighting challenges in generating returns for shareholders. The equity ratio stands at 17.37% TTM, suggesting a moderate level of equity financing. Overall, the balance sheet shows high leverage and negative returns, posing potential financial stability concerns.

Cash Flow

Cash flow analysis shows a decline in free cash flow growth by -25.52% TTM, indicating reduced cash generation. The operating cash flow to net income ratio is 0.23 TTM, suggesting moderate cash conversion efficiency. The free cash flow to net income ratio is 0.74 TTM, indicating that free cash flow covers a significant portion of net income. Overall, cash flow performance is moderate, with concerns about declining free cash flow growth.

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	99.48M	91.23M	66.34M	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	296.38M	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: Negative
• Last Price: 6.24
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• 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 6.24 is below the 20-day moving average (MA) of 6.45, below the 50-day MA of 6.75, and below the 200-day MA of 6.46, indicating a bearish trend. The MACD of -0.22 indicates Positive momentum. The RSI at 28.95 is Positive, neither overbought nor oversold. The STOCH value of 26.93 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	69 Neutral	€91.87M	8.21	7.17%	6.12%	-4.01%	-10.36%
Sector *	61 Neutral	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%
NVM	60 Neutral	€120.48M	6.57	19.67%	―	-9.08%	-34.48%
BDT	56 Neutral	€204.64M	-1.96	-26.01%	1.38%	-11.16%	-463.07%
ED4	45 Neutral	€170.00M	-4.84	-47.18%	8.81%	-13.53%	-394.79%
GMM	45 Neutral	€90.15M	5.37	9.81%	―	-10.08%	―
ZIL2	43 Neutral	€255.34M	-1.53	-16.55%	3.73%	-6.21%	-995.53%