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

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DE:HAG

HENSOLDT AG

(XETRA:HAG)

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Neutral 65 (OpenAI - 4o)
Rating:65Neutral
Price Target:
€103.00
▲(7.52% Upside)
HENSOLDT AG's overall score reflects strong financial performance and strategic positioning in the defense market, offset by high valuation concerns and technical indicators suggesting bearish momentum. The earnings call provided positive guidance, but challenges in logistics and cash flow management remain.
Positive Factors
Strong Order Backlog
A substantial order backlog provides excellent visibility for future growth, ensuring steady revenue streams and reinforcing market position.
Strategic Positioning
Strategic positioning in defense markets enhances long-term growth prospects, driven by increased defense budgets and procurement programs.
Pioneering Software-Defined Defense
Leadership in software-defined defense could drive innovation and competitive advantage, aligning with digital transformation trends in defense.
Negative Factors
High Leverage
High leverage poses financial risks, potentially limiting flexibility and increasing vulnerability to interest rate changes.
Free Cash Flow Decline
Negative free cash flow indicates cash management challenges, which could impact the ability to fund operations and growth initiatives.
Profitability Margin Decline
Declining profitability margins may affect long-term financial health, necessitating efficiency improvements to sustain competitiveness.

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

HENSOLDT AG Business Overview & Revenue Model

Company DescriptionHENSOLDT AG (HAG) is a leading global provider of sensors and sensor solutions for defense and security applications. The company specializes in areas such as radar systems, electronic warfare, optronics, and avionics, serving both military and civilian sectors. HENSOLDT's core products include advanced radar systems, airborne sensors, and intelligence solutions designed to enhance situational awareness and operational effectiveness for armed forces and security agencies worldwide.
How the Company Makes MoneyHENSOLDT 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 Earnings Call Summary

Earnings Call Date:Jul 31, 2025
(Q2-2025)
|
% Change Since: |
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
75
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
65
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
70
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
Negative
Last Price95.80
Price Trends
50DMA
96.93
Negative
100DMA
95.92
Negative
200DMA
78.88
Positive
Market Momentum
MACD
-1.01
Positive
RSI
43.99
Neutral
STOCH
43.01
Neutral
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 95.8 is below the 20-day moving average (MA) of 103.57, below the 50-day MA of 96.93, and above the 200-day MA of 78.88, indicating a neutral trend. The MACD of -1.01 indicates Positive momentum. The RSI at 43.99 is Neutral, neither overbought nor oversold. The STOCH value of 43.01 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for DE:HAG.

HENSOLDT AG Peers Comparison

Overall Rating
UnderperformOutperform
Sector (63)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
€20.93B24.5624.74%0.58%45.24%
€1.16B14.947.86%1.88%-2.59%-3.21%
€10.49B115.3111.52%0.52%18.53%73.20%
$10.79B15.437.44%2.01%2.89%-14.66%
€2.25B389.721.42%0.55%1.67%-91.60%
€80.93B93.8721.91%0.47%31.24%52.48%
€6.27B81.5919.17%0.63%21.91%125.93%
* Industrials Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
DE:HAG
HENSOLDT AG
95.80
64.10
202.21%
DE:JEN
Jenoptik
20.36
-2.12
-9.41%
DE:MTX
MTU Aero Engines
380.50
76.66
25.23%
DE:OHB
OHB SE
109.50
64.26
142.02%
DE:RHM
Rheinmetall
1,731.50
1,245.26
256.10%
DE:R3NK
RENK Group AG
66.30
47.35
249.87%

HENSOLDT AG Corporate Events

HENSOLDT AG Reports Strong Growth Amid Challenges
Aug 6, 2025

The recent earnings call for HENSOLDT AG painted a picture of robust growth and strategic challenges. The sentiment was generally positive, with strong order intake and revenue growth taking center stage. However, the company also faced some hurdles, including temporary productivity issues in the Sensors segment and strategic challenges within its South African entity, alongside a negative free cash flow.

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: Oct 28, 2025