hGears AG (HGEA) AI Stock Analysis

• Market Cap: €16.22M
• Dividend Yield: N/A
• Average Volume (3M): 1.50K
• Price to Earnings (P/E): ―
• Beta (1Y): -0.35
• Revenue Growth: -10.38%
• EPS Growth: -19.93%
• Country: DE
• Employees: 647
• Sector: Consumer Cyclical
• Sector Strength: 84
• Industry: Auto - Parts
• EPS (TTM): N/A
• Shares Outstanding: 10,400,000
• 10 Day Avg. Volume: 1,799
• 30 Day Avg. Volume: 1,504
• PEG Ratio: -0.02
• Price to Book (P/B): 0.33
• Price to Sales (P/S): 0.18
• P/FCF Ratio: -2.80
• 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: N/A
• Number of Analyst Covering: 0
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 43 Neutral
• Price Target: €1.50 ▼(-6.25% Downside)

The score is driven down primarily by deteriorating financials (declining revenue, persistent losses, and negative operating/free cash flow). Technicals add further pressure with the stock trading below key moving averages and weak momentum indicators. Valuation is also constrained by negative earnings (negative P/E) and no dividend yield data.

Positive Factors

Reduced Leverage

Lower leverage materially improves balance-sheet flexibility and reduces interest burden. With debt-to-equity at 0.50, the company has greater capacity to finance modernization, absorb cyclicality in auto demand, and support targeted investments that enhance long-term competitiveness.

Strong Gross Margins

A 43.8% gross margin reflects efficient manufacturing and product pricing in core precision components. This structural margin provides a cushion against raw-material swings and creates the operating leverage necessary to return to profitability if SG&A is disciplined and volumes recover over ensuing quarters.

Durable Contract Revenue Base

Long-term contracts and strategic partnerships with OEMs create predictable demand, higher switching costs, and stable aftermarket streams. That contractual stability supports capacity planning, justifies manufacturing investment, and enables economies of scale that can sustain margins over multiple quarters.

Negative Factors

Declining Revenue Trend

A substantial multi-year revenue decline erodes scale advantages and raises unit overheads. Sustained top-line contraction undermines pricing and supplier leverage, reduces funds for R&D and capex, and makes operational fixes and margin recovery more difficult without new contract wins or market share gains.

Negative Operating Cash Flow

Negative operating cash flow shows the business is not converting operations into cash, forcing dependence on external financing or asset drawdowns. That constrains working-capital support for OEM programs, limits reinvestment in tooling and efficiency, and increases exposure to industry downturns.

Persistent Losses and Equity Erosion

A large net loss and marked decline in shareholders' equity signal capital erosion and negative returns on invested capital. Persistent losses limit internal funding for growth, weaken credit standing, increase refinancing or dilution risk, and may necessitate restructuring to restore a durable financial footing.

hGears AG Business Overview & Revenue Model

Company Description

hGears AG develops, manufactures, and supplies precision components and sub-systems, and system solutions worldwide. The company offers gears, sprockets, shafts, structural components, complete gearboxes, and other components. Its products are used in e-bikes, and electric and hybrid vehicles, as well as e-drive power and gardening tools. The company was founded in 1958 and is headquartered in Schramberg, Germany.

How the Company Makes Money

hGears AG generates revenue primarily through the sale of its precision components and assemblies to automotive manufacturers and industrial clients. The company's revenue model is centered around long-term contracts and partnerships with major players in the automotive sector, which provides a steady stream of income. Key revenue streams include the sale of gears and transmission systems, aftermarket components, and custom-engineered solutions tailored to specific customer needs. Additionally, hGears AG benefits from economies of scale in its production processes and invests in research and development to enhance its product offerings, thus driving further sales. Strategic collaborations with prominent automotive firms also contribute to the company's financial stability and growth potential.

hGears AG Financial Statement Overview

Summary

Financial performance is weak: revenue declined sharply (2022 to 2024), the company posted a sizable net loss in 2024, and both EBIT/EBITDA margins are negative. Leverage has improved (lower debt-to-equity), but equity has shrunk materially and operating/free cash flow turned negative, signaling ongoing strain.

Income Statement

The company has experienced a significant decline in revenue from $135.3M in 2022 to $95.7M in 2024, reflecting a negative growth trend. The net profit margin is also negative, with a net loss of $21.2M in 2024. Gross profit margin stands at 43.8%, indicating some level of profitability in core operations, but overall profitability is hampered by high operating expenses and negative EBIT and EBITDA margins.

Balance Sheet

The debt-to-equity ratio has improved from 1.35 in 2020 to 0.50 in 2024, indicating reduced leverage. However, return on equity is negative due to persistent net losses. Equity ratio remains stable at around 50%, suggesting a balanced capital structure. The reduction in stockholders' equity from $88.2M in 2022 to $52.9M in 2024 raises concerns about the company's financial stability.

Cash Flow

The company has transitioned from positive to negative operating cash flow, reaching -$4.9M in 2024, indicating operational challenges. Free cash flow has also deteriorated, with no significant growth, and is currently negative, reflecting the company's inability to generate cash after covering capital expenditures. The cash flow to net income ratios highlight inefficiencies in converting income into cash flow.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	94.84M	95.71M	112.47M	135.33M	134.91M	126.26M
Gross Profit	17.73M	41.92M	55.96M	70.68M	76.39M	72.26M
EBITDA	-1.95M	-3.71M	923.00K	12.00M	19.08M	19.62M
Net Income	-19.55M	-21.17M	-13.79M	-841.00K	2.35M	6.71M
Balance Sheet
Total Assets	95.32M	107.02M	136.75M	157.01M	156.38M	124.85M
Cash, Cash Equivalents and Short-Term Investments	9.38M	17.13M	26.60M	37.28M	47.25M	23.43M
Total Debt	23.98M	26.32M	29.82M	34.35M	35.79M	69.83M
Total Liabilities	49.78M	54.14M	63.00M	68.87M	67.72M	99.30M
Stockholders Equity	45.54M	52.88M	73.74M	88.14M	88.66M	25.55M
Cash Flow
Free Cash Flow	-2.29M	-6.31M	-4.13M	-5.68M	-4.04M	9.24M
Operating Cash Flow	-4.40M	-4.86M	4.11M	7.42M	10.15M	17.27M
Investing Cash Flow	-1.84M	-641.00K	-8.10M	-14.10M	-13.90M	-8.03M
Financing Cash Flow	-5.85M	-4.13M	-5.43M	-4.20M	27.19M	-3.40M

hGears AG Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 1.60
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For DE:HGEA, the sentiment is Negative. The current price of 1.6 is above the 20-day moving average (MA) of 1.54, above the 50-day MA of 1.50, and below the 200-day MA of 1.67, indicating a bearish trend. The MACD of >-0.01 indicates Positive momentum. The RSI at 41.12 is Neutral, neither overbought nor oversold. The STOCH value of 40.37 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for DE:HGEA.

hGears AG Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
PWO	72 Outperform	€82.50M	7.15	7.17%	5.91%	-4.01%	-10.36%
Sector *	61 Neutral	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%
IS7	48 Neutral	€9.54M	-2.35	-22.94%	―	-11.97%	-76.11%
GMM	46 Neutral	€108.77M	6.57	9.81%	―	-10.08%	―
SF3	45 Neutral	€20.12M	-33.33	-1.36%	1.58%	4.55%	45.49%
HGEA	43 Neutral	€16.22M	-0.76	-35.15%	―	-10.38%	-19.93%
MSAG	43 Neutral	€39.17M	-5.21	-11.55%	―	-40.37%	-406.54%