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HENSOLDT AG (DE:HAG)
:HAG
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HENSOLDT AG (HAG) AI Stock Analysis

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DE:HAG

HENSOLDT AG

(XETRA:HAG)

Rating:64Neutral
Price Target:
€93.00
▲(7.45% Upside)
HENSOLDT AG's overall score is driven by strong financial performance and positive earnings call insights, highlighting robust order intake and strategic positioning. However, high leverage, potential overvaluation, and technical indicators pointing to a bearish trend weigh down the score.
Positive Factors
Earnings
Q2 results show a better performance than feared, with sales up 6% and EBITDA up 10%.
Growth Strategy
The sale of a lower margin activity could be well-received and enable stronger growth in Optronics.
Long-term Outlook
Longer-term, the increase in the 2030 revenue ambition will be welcomed, based on a modest 2.5% of GDP defense spend assumption.
Negative Factors
Cash Flow
Free cash flow stood at negative €107 million, which was in line with expectations.
Operational Challenges
The operational reorganization continues to weigh on EBITDA margin in Sensors, with EBITDA margin down 80bps in Q2.
Performance Challenges
The South African entity has faced challenges with lower volumes impacting both sales and profitability.

HENSOLDT AG (HAG) vs. iShares MSCI Germany ETF (EWG)

HENSOLDT AG Business Overview & Revenue Model

Company DescriptionHensoldt 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 MoneyHENSOLDT AG generates revenue primarily through the sale of its highly specialized sensor technologies and integrated solutions to defense and security clients. Key revenue streams include contracts with government defense departments for products such as radar systems, electronic warfare equipment, and avionics solutions. Additionally, HENSOLDT engages in partnerships with other defense companies and leverages its research and development capabilities to innovate and expand its product offerings, contributing to its earnings. The company's revenue is also supported by maintenance, repair, and upgrade services for its products, ensuring ongoing customer engagement and recurring income.

HENSOLDT AG Earnings Call Summary

Earnings Call Date:Jul 31, 2025
(Q2-2025)
|
% Change Since: -6.58%|
Next Earnings Date:Nov 07, 2025
Earnings Call Sentiment Positive
The earnings call highlighted strong order intake, revenue growth, and strategic positioning in the defense market, supported by successful refinancing and advancements in software-defined defense. However, challenges in logistics ramp-up, Optronics South Africa, and free cash flow decline were noted.
Q2-2025 Updates
Positive Updates
Strong Order Intake and Backlog
Order intake in H1 2025 reached EUR 1.5 billion, with a record order backlog exceeding EUR 7 billion, providing excellent visibility for future growth.
Revenue Growth
Group revenue increased by 11% to EUR 944 million, driven by strong momentum in the Optronics business, with core revenue growing by 14% excluding pass-through.
Strategic Positioning
Hensoldt is well-positioned to benefit from increased German defense spending and European procurement programs, with significant anticipated orders for platforms like the Eurofighter and the Leopard 2 tank.
Pioneering Software-Defined Defense
The appointment of Sven Heursch as Head of Software-Defined Defense and Digitalization is expected to accelerate progress in this strategic area.
Successful Refinancing
Hensoldt successfully issued a EUR 300 million promissory note loan, strengthening its capital structure and financial flexibility.
Negative Updates
Logistics Center Ramp-up Impact
The ramp-up of the new logistics center led to temporary lower productivity within the Sensors segment, impacting the adjusted EBITDA margin.
Optronics South Africa Challenges
While the German entity in Optronics performed strongly, the South African entity faced ongoing technology changes and strategic realignment challenges, impacting revenue development.
Free Cash Flow Decline
Adjusted free cash flow was negative EUR 181 million, driven by investments in working capital to support planned business volume in the second half of the year.
Company Guidance
During the Hensoldt AG H1 2025 Analyst Conference Call, the company reaffirmed its fiscal year 2025 guidance, emphasizing strong order intake and solid financial performance. The order intake for H1 2025 reached EUR 1.4 billion, with a robust order backlog of over EUR 7 billion, indicating excellent visibility for future growth. Group revenue increased by 11% to EUR 944 million, driven by sustained momentum in the Optronics segment. The company anticipates a revenue range of EUR 2.5 billion to EUR 2.6 billion for 2025, with an expected adjusted EBITDA margin of around 18%. Adjusted EBITDA for H1 2025 was EUR 107 million, reflecting a margin of 11.3%. Despite a temporary lower productivity due to logistics ramp-up, Hensoldt expects improvements as the year progresses. Additionally, the company highlighted strategic investments in its logistics center and the Oberkochen site, which are expected to enhance long-term competitiveness and operational efficiency. Adjusted free cash flow stood at minus EUR 181 million, influenced by investments in working capital. The company maintains a disciplined deleveraging path, targeting a leverage of around 1.5x and a dividend payout ratio of 30% to 40% of adjusted net income.

HENSOLDT AG Financial Statement Overview

Summary
HENSOLDT AG demonstrates strong financial health with robust revenue growth, effective cost management, and operational efficiency. Despite high leverage, the company maintains a solid return on equity. However, the decline in free cash flow growth is a potential concern.
Income Statement
85
Very Positive
HENSOLDT AG has demonstrated strong revenue growth over the past years, with a notable TTM revenue growth rate of approximately 2.90% and a significant increase from 2023. The company maintains healthy gross and net profit margins at 21.89% and 4.03% respectively in the TTM period, indicating effective cost management and profitability. EBITDA margin remains robust at 15.87%, showcasing operational efficiency. However, EBIT margin has slightly decreased from 8.26% in 2024 to 7.59% in the TTM, suggesting a need for closer monitoring of operating expenses.
Balance Sheet
78
Positive
The balance sheet reveals a solid equity position with an equity ratio of 18.89% in the TTM. The debt-to-equity ratio is relatively high at 1.69, indicating leverage that could pose a risk if interest rates rise or cash flows decrease. However, the return on equity remains strong at 10.33%, reflecting efficient use of shareholders' capital. The company shows a consistent ability to maintain its asset base and equity levels, which is crucial for long-term stability.
Cash Flow
82
Very Positive
HENSOLDT AG exhibits a dependable cash flow position with an operating cash flow to net income ratio of 3.15 in the TTM, suggesting strong cash conversion from profits. Free cash flow has decreased in the TTM period, leading to a negative free cash flow growth rate of -23.21%, which could be a concern if the trend continues. Nonetheless, the free cash flow to net income ratio of 0.92 indicates that the company is still generating sufficient cash relative to its net income.
BreakdownTTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue2.34B2.24B1.85B1.71B1.47B1.21B
Gross Profit503.00M509.00M416.00M394.00M329.80M270.80M
EBITDA356.00M379.00M293.00M267.00M249.00M156.60M
Net Income91.00M108.00M54.00M78.00M63.00M-64.50M
Balance Sheet
Total Assets4.65B4.70B3.84B2.98B2.95B2.95B
Cash, Cash Equivalents and Short-Term Investments326.00M734.00M803.00M462.00M534.00M657.80M
Total Debt1.44B1.38B854.00M789.00M943.90M1.12B
Total Liabilities3.80B3.81B3.02B2.36B2.54B2.60B
Stockholders Equity836.00M872.00M808.00M604.00M399.30M333.90M
Cash Flow
Free Cash Flow111.00M112.00M153.00M149.00M197.20M99.50M
Operating Cash Flow317.00M311.00M267.00M244.00M299.20M196.90M
Investing Cash Flow-232.00M-745.00M-122.00M-101.00M-117.10M-95.00M
Financing Cash Flow-159.00M367.00M197.00M-214.00M-297.20M411.00M

HENSOLDT AG Technical Analysis

Technical Analysis Sentiment
Positive
Last Price86.55
Price Trends
50DMA
94.07
Negative
100DMA
84.75
Positive
200DMA
64.40
Positive
Market Momentum
MACD
-3.32
Positive
RSI
45.21
Neutral
STOCH
54.19
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For DE:HAG, the sentiment is Positive. The current price of 86.55 is below the 20-day moving average (MA) of 88.51, below the 50-day MA of 94.07, and above the 200-day MA of 64.40, indicating a neutral trend. The MACD of -3.32 indicates Positive momentum. The RSI at 45.21 is Neutral, neither overbought nor oversold. The STOCH value of 54.19 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for DE:HAG.

HENSOLDT AG Peers Comparison

Overall Rating
UnderperformOutperform
Sector (59)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
64
Neutral
€10.00B109.8511.52%0.58%18.53%73.20%
59
Neutral
AU$1.70B11.35-2.47%3.53%6.84%3.98%
€1.00B12.987.86%1.32%
€20.49B24.0824.74%
€1.29B228.861.42%0.87%
€73.71B85.6021.91%
58
Neutral
€5.85B76.0719.17%0.72%21.91%125.93%
* Industrials Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
DE:HAG
HENSOLDT AG
86.55
53.40
161.09%
GB:0ZPV
Jenoptik
17.91
-9.33
-34.25%
GB:0FC9
MTU Aero Engines
381.50
116.89
44.17%
GB:0FH7
OHB SE
69.00
25.04
56.96%
GB:0NI1
Rheinmetall
1,622.50
1,089.60
204.47%
DE:R3NK
RENK Group AG
58.47
33.05
130.02%
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.Date of analysis: Aug 23, 2025