hGears AG (HGEA) AI Stock Analysis

• Market Cap: €19.24M
• Dividend Yield: N/A
• Average Volume (3M): 2.08K
• Price to Earnings (P/E): ―
• Beta (1Y): -0.60
• Revenue Growth: -10.38%
• EPS Growth: -19.93%
• Country: DE
• Employees: 647
• Sector: Consumer Cyclical
• Sector Strength: 79
• Industry: Auto - Parts
• EPS (TTM): -0.62
• Shares Outstanding: 10,400,000
• 10 Day Avg. Volume: 704
• 30 Day Avg. Volume: 2,078
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• 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: €2.00
• Price Target Upside: 8.11% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 0

• Rating: 49 Neutral
• Price Target: €2.00 ▲(8.11% Upside)

The overall stock score of 49 reflects significant financial challenges faced by hGears AG, with declining revenues and negative cash flows being the primary concerns. Technical analysis suggests short-term bullish momentum, but valuation metrics highlight fundamental weaknesses due to persistent losses. The lack of earnings call and corporate events data further underscores uncertainty and risk.

Positive Factors

Reduced Leverage

The reduction in leverage suggests improved financial discipline and reduced risk of insolvency, providing a more stable financial foundation for future growth.

Strong Gross Profit Margin

A strong gross profit margin indicates effective cost management in core operations, which can support profitability improvement if operational efficiencies are enhanced.

Presence in E-Mobility Sector

The focus on e-mobility positions hGears AG to benefit from the structural shift towards electric vehicles, potentially driving future revenue growth.

Negative Factors

Declining Revenue

The significant revenue decline reflects market challenges and potential loss of market share, which could hinder long-term growth prospects if not addressed.

Negative Cash Flow

Negative cash flow indicates operational inefficiencies and challenges in generating sufficient cash to support business operations, impacting financial flexibility.

Persistent Losses

Ongoing losses reflect underlying operational issues and could strain resources, necessitating strategic changes to achieve sustainable profitability.

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 gear systems, which are integral to various automotive and industrial applications. The company has a strong presence in the e-mobility sector, providing essential components for electric and hybrid vehicles. Revenue streams include direct sales to automotive manufacturers, industrial clients, and partnerships with leading companies in the e-mobility industry. hGears also leverages its advanced manufacturing techniques and engineering expertise to offer customized solutions, further enhancing its revenue potential. Strategic partnerships and long-term contracts with major clients contribute significantly to its financial performance.

hGears AG Financial Statement Overview

Summary

hGears AG is facing financial difficulties, characterized by declining revenues, persistent losses, and negative cash flows. Although leverage has been reduced, the company's profitability and cash generation remain weak. The auto parts industry presents both opportunities and challenges, but the current financial trajectory suggests a need for strategic adjustments to stabilize and improve financial health.

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	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	95.71M	112.47M	135.33M	134.91M	126.26M
Gross Profit	41.92M	3.56M	69.78M	76.39M	72.26M
EBITDA	-3.71M	923.00K	12.00M	19.08M	19.35M
Net Income	-21.17M	-13.79M	-841.00K	2.35M	6.71M
Balance Sheet
Total Assets	107.02M	136.75M	157.01M	156.38M	124.85M
Cash, Cash Equivalents and Short-Term Investments	17.13M	26.60M	36.28M	47.25M	23.43M
Total Debt	26.32M	29.82M	34.35M	35.79M	69.83M
Total Liabilities	54.14M	63.00M	68.87M	67.72M	99.30M
Stockholders Equity	52.88M	73.74M	88.14M	88.66M	25.55M
Cash Flow
Free Cash Flow	-6.31M	-4.13M	-5.68M	-4.04M	9.24M
Operating Cash Flow	-4.86M	4.11M	7.42M	10.15M	17.27M
Investing Cash Flow	-641.00K	-8.10M	-14.10M	-13.90M	-8.03M
Financing Cash Flow	-4.13M	-5.43M	-4.20M	27.19M	-3.40M

hGears AG Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 1.85
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• 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 Neutral. The current price of 1.85 is below the 20-day moving average (MA) of 1.88, above the 50-day MA of 1.72, and above the 200-day MA of 1.75, indicating a neutral trend. The MACD of 0.03 indicates Positive momentum. The RSI at 52.43 is Neutral, neither overbought nor oversold. The STOCH value of 38.57 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for DE:HGEA.

hGears AG Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
Sector *	61 Neutral	$18.09B	12.97	-1.60%	2.98%	1.42%	-15.92%
HGEA	49 Neutral	€19.24M	―	-35.15%	―	-10.38%	-19.93%
0OQX	―	€91.64M	―	-16.40%	―	―	―
0J9S	―	€8.49M	―	-21.88%	―	―	―
0N2B	―	€43.66M	21.26	-11.55%	―	―	―
0NHL	―	€88.13M	7.93	7.01%	―	―	―
SF3	55 Neutral	€28.12M	―	-1.36%	1.15%	4.55%	45.49%