HENSOLDT AG (HAG) AI Stock Analysis

• Market Cap: €9.66B
• Dividend Yield: 0.68%
• Average Volume (3M): 536.28K
• Price to Earnings (P/E): 78.8
• Beta (1Y): 1.45
• Revenue Growth: 14.89%
• EPS Growth: 619.09%
• Country: DE
• Employees: 8,986
• Sector: Industrials
• Sector Strength: 72
• Industry: Aerospace & Defense
• EPS (TTM): 0.10
• Shares Outstanding: 115,500,000
• 10 Day Avg. Volume: 473,044
• 30 Day Avg. Volume: 536,278
• PEG Ratio: 0.45
• Price to Book (P/B): 4.59
• Price to Sales (P/S): 1.79
• P/FCF Ratio: 35.73
• 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: €91.00
• Price Target Upside: 8.79% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 10
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 68 Neutral
• Price Target: €92.00 ▲(9.98% Upside)

HENSOLDT AG's overall stock score is driven by strong earnings call results and solid financial performance, despite high leverage and valuation concerns. The company's robust order backlog and positive future growth expectations are significant strengths, while technical indicators and valuation metrics suggest caution.

Positive Factors

Record order backlog

A EUR 7.1bn backlog provides multi-year revenue visibility and backlog-driven production planning, reducing near-term demand cyclicality. This secures future revenue streams, supports utilization and margin improvement, and underpins predictable aftermarket and upgrade services over several years.

Strong free cash flow growth

Substantial free cash flow growth indicates robust cash generation from operations, enabling the company to fund capex, invest in capacity (e.g., new radar site), and pursue deleveraging without dilutive financing. Durable cash conversion supports operational flexibility and strategic investments.

Recurring aftermarket and services

High-margin aftermarket services and long-term sustainment contracts create stable annuity-like revenues and strong customer ties. These services raise switching costs, smooth revenue over procurement cycles, and support lifetime value of platforms—strengthening resilience against new-build volatility.

Negative Factors

High financial leverage

Significant leverage increases refinancing and interest rate risk, limiting strategic flexibility and raising vulnerability to demand shocks. A low equity ratio constrains balance sheet buffer for program delays or cost overruns, making sustained deleveraging a critical structural priority.

Pressure on profitability margins

Thin and declining margins reduce the firm's ability to absorb rising input costs or invest in R&D and capacity. Sustained margin pressure could limit reinvestment and slower margin recovery would constrain free cash flow, hampering long-term competitiveness versus better‑capitalized peers.

Working capital and ramp-up cash strain

Large working-capital build and logistical ramp-ups consume cash and can delay reaching net leverage goals. Prolonged negative adjusted FCF increases reliance on external financing, elevating execution risk for capacity expansions and potentially slowing planned deleveraging and strategic investments.

HENSOLDT AG Business Overview & Revenue Model

Company Description

Hensoldt AG, together with its subsidiaries, provides defense and security electronic sensor solutions worldwide. It offers air surveillance, airborne, ground based, security, naval and coastal, and space radars; identification friend or foe and secure data links; and commercial shipping solutions. The company also provides airborne, vehicle, surveillance, and maritime optronics; space optics; optronic sensor devices; and sights, scopes, and night-vision attachments. In addition, it offers electronic support/SIGINT products, receivers, direction finders, electronic attackers/jammers, self-protection EW software suites and ground support stations, and electronic warfare systems. Further, the company provides avionics, including airborne computing, flight and mission data recording and management, connectivity, mission management/pilot assistance, video management, unmanned, mission planning support, data analysis and evaluation, and cloud solutions, as well as integrated airborne solutions; and counter UAV solutions, and command and control software products. Additionally, it offers products and system support, simulation, and training services; and antenna, cabling, shelter, and tester solutions. The company is headquartered in Taufkirchen, Germany.

How the Company Makes Money

HENSOLDT AG generates revenue primarily through the development and sale of advanced sensor technologies and systems to governments and defense contractors. The company's revenue model is predominantly based on long-term contracts with national defense ministries and international defense organizations, which provide a steady stream of income. Key revenue streams include the sale of military radar systems, electronic warfare solutions, and related services such as maintenance and upgrades. Additionally, HENSOLDT benefits from strategic partnerships with other defense corporations and participation in defense procurement programs, which further enhance its market presence and earnings potential. The company also invests in research and development to innovate and expand its product offerings, ensuring continued growth in a competitive market.

HENSOLDT AG Financial Statement Overview

Summary

HENSOLDT AG shows solid financial performance with consistent revenue growth and strong cash flow generation. However, challenges with profitability margins and high leverage pose risks to future financial stability. Continued focus on cost management and debt reduction is crucial.

Income Statement

HENSOLDT AG's income statement shows a positive trajectory with consistent revenue growth, highlighted by a 2.74% increase in TTM. Gross profit margin is stable at 21.53%, though slightly lower than the previous year. Net profit margin has decreased to 3.90% in TTM, indicating some pressure on profitability. EBIT and EBITDA margins have also seen a slight decline, suggesting potential cost pressures or increased competition.

Balance Sheet

The balance sheet reflects a high debt-to-equity ratio of 1.72 in TTM, indicating significant leverage, which could pose risks if not managed carefully. Return on equity is moderate at 10.97%, showing efficient use of equity but with room for improvement. The equity ratio stands at 16.95%, suggesting a reliance on debt financing.

Cash Flow

Cash flow analysis reveals strong free cash flow growth of 72.97% in TTM, indicating robust cash generation capabilities. The operating cash flow to net income ratio is healthy at 0.156, and free cash flow to net income ratio is 0.35, reflecting efficient cash conversion. These metrics highlight the company's solid cash flow position, supporting its operational and financial flexibility.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	2.40B	2.24B	1.85B	1.71B	1.47B	1.21B
Gross Profit	515.00M	509.00M	416.00M	394.00M	329.80M	270.80M
EBITDA	388.00M	379.00M	293.00M	267.00M	253.00M	156.60M
Net Income	124.00M	108.00M	54.00M	78.00M	63.00M	-64.50M
Balance Sheet
Total Assets	4.97B	4.70B	3.84B	2.98B	2.95B	2.95B
Cash, Cash Equivalents and Short-Term Investments	532.00M	734.00M	803.00M	462.00M	534.00M	657.80M
Total Debt	1.59B	1.38B	854.00M	789.00M	943.90M	1.12B
Total Liabilities	4.12B	3.81B	3.02B	2.36B	2.54B	2.60B
Stockholders Equity	843.00M	872.00M	808.00M	604.00M	399.30M	333.90M
Cash Flow
Free Cash Flow	192.00M	112.00M	153.00M	149.00M	197.20M	99.50M
Operating Cash Flow	394.00M	311.00M	267.00M	244.00M	299.20M	196.90M
Investing Cash Flow	-231.00M	-745.00M	-122.00M	-101.00M	-117.10M	-95.00M
Financing Cash Flow	-26.00M	367.00M	197.00M	-214.00M	-297.20M	411.00M

HENSOLDT AG Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 83.65
• 50DMA: Positive
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For DE:HAG, the sentiment is Negative. The current price of 83.65 is below the 20-day moving average (MA) of 87.66, above the 50-day MA of 78.05, and below the 200-day MA of 87.87, indicating a neutral trend. The MACD of 1.59 indicates Positive momentum. The RSI at 48.63 is Neutral, neither overbought nor oversold. The STOCH value of 19.34 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for DE:HAG.

HENSOLDT AG Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
JEN	76 Outperform	€1.53B	18.78	7.17%	1.97%	-5.27%	-13.70%
MTX	76 Outperform	€20.14B	23.48	24.74%	0.62%	45.24%	―
HAG	68 Neutral	€9.66B	78.75	15.96%	0.68%	14.89%	619.09%
RHM	63 Neutral	€81.74B	94.52	21.48%	0.53%	24.61%	45.20%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%
OHB	59 Neutral	€5.72B	863.47	1.49%	0.51%	10.80%	-91.79%
R3NK	55 Neutral	€5.40B	54.12	24.75%	0.80%	22.71%	396.57%