Hochtief (HOT) AI Stock Analysis

• Market Cap: €18.36B
• Dividend Yield: 2.1%
• Average Volume (3M): 64.14K
• Price to Earnings (P/E): 22.8
• Beta (1Y): 1.16
• Revenue Growth: 25.95%
• EPS Growth: 17.64%
• Country: DE
• Employees: 54,035
• Sector: Industrials
• Sector Strength: 72
• Industry: Engineering & Construction
• EPS (TTM): 4.72
• Shares Outstanding: 77,711,300
• 10 Day Avg. Volume: 65,004
• 30 Day Avg. Volume: 64,141
• 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: €211.50
• Price Target Upside: -15.06% Downside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 2

• Rating: 68 Neutral
• Price Target: €265.00 ▲(6.43% Upside)

Hochtief's stock score is primarily driven by solid financial performance, despite concerns over profitability and leverage. Technical analysis shows a positive trend, supporting the stock's outlook. However, the valuation suggests the stock may be overvalued, which tempers the overall score.

Positive Factors

Revenue Growth

Consistent revenue growth indicates strong market demand and effective project execution, enhancing long-term business stability and expansion potential.

Efficient Cost Management

Stable gross profit margins reflect effective cost control, which supports sustainable profitability and competitive pricing strategies over time.

Strong Return on Equity

A high return on equity signifies efficient capital utilization, enhancing shareholder value and supporting future investments and growth.

Negative Factors

High Leverage

High leverage can increase financial risk, limiting flexibility and increasing vulnerability to interest rate changes, potentially impacting long-term financial health.

Low Net Profit Margin

Low net profit margins indicate challenges in converting revenue into profit, which may hinder long-term profitability and investment capacity.

Decline in Free Cash Flow

A decline in free cash flow can constrain the company's ability to fund operations, invest in growth opportunities, and return capital to shareholders.

Hochtief Business Overview & Revenue Model

Company Description

HOCHTIEF Aktiengesellschaft engages in the construction business worldwide. The company operates through HOCHTIEF Americas, HOCHTIEF Asia Pacific, HOCHTIEF Europe, and Abertis Investment divisions. The HOCHTIEF Americas division provides building and transportation infrastructure construction services primarily in the United States and Canada. The HOCHTIEF Asia Pacific division offers infrastructure construction, resource and mineral processing services, engineering and technical services, and maintenance services in the Asia-Pacific region. This division also undertakes public-private partnerships (PPP). The HOCHTIEF Europe division provides services primarily for infrastructure and building construction projects, as well as PPP in transportation, energy, social, and urban infrastructure. It also offers engineering services, including virtual construction, and facility management; and designs, develops, builds, operates, and manages real estate and infrastructure. The Abertis Investment segment operates toll roads in France, Spain, North America, Brazil, Chile, and Mexico. The company also provides insurance products; and reinsurance products primarily for contractors' casualty and surety, subcontractor default, liability, and occupational accident insurance. HOCHTIEF Aktiengesellschaft was founded in 1873 and is headquartered in Essen, Germany. HOCHTIEF Aktiengesellschaft operates as a subsidiary of ACS, Actividades de Construcción y Servicios, S.A.

How the Company Makes Money

Hochtief generates revenue primarily through its construction projects, which include civil engineering and building services. The company's revenue model is based on contracting for large-scale construction projects, which are often awarded through competitive bidding processes. Key revenue streams include payments for completed construction work, project management services, and maintenance contracts. Additionally, Hochtief engages in PPP projects, which provide long-term revenue through the operation of infrastructure assets. Significant partnerships with public entities and private developers enhance its project pipeline and facilitate access to new markets, thereby contributing to the company's overall earnings.

Hochtief Financial Statement Overview

Summary

Hochtief demonstrates solid revenue growth and efficient cost management, but profitability remains a concern with low net profit margins. The high leverage poses financial risks, although the company effectively generates returns on equity. Cash flow management is generally sound, but recent declines in free cash flow growth warrant attention.

Income Statement

Hochtief has shown consistent revenue growth, with a TTM revenue growth rate of 4.39%. The gross profit margin is stable at around 26.56%, indicating efficient cost management. However, the net profit margin is relatively low at 2.22%, suggesting room for improvement in profitability. The EBIT and EBITDA margins are modest, reflecting moderate operational efficiency.

Balance Sheet

The company has a high debt-to-equity ratio of 0.93 in the TTM, indicating significant leverage, which could pose financial risks. However, the return on equity is strong at 87.65%, demonstrating effective use of equity to generate profits. The equity ratio is low, suggesting a reliance on debt financing.

Cash Flow

Operating cash flow is strong, but free cash flow has decreased by 3.5% in the TTM, indicating potential challenges in cash generation. The operating cash flow to net income ratio is low, suggesting that not all net income is translating into cash. The free cash flow to net income ratio is healthy at 73.35%, indicating good cash conversion.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	37.02B	33.30B	27.76B	26.22B	21.38B	22.95B
Gross Profit	9.83B	8.78B	6.85B	6.32B	5.29B	5.55B
EBITDA	2.33B	2.03B	1.07B	968.99M	747.04M	1.67B
Net Income	820.32M	775.63M	522.75M	481.77M	293.40M	427.24M
Balance Sheet
Total Assets	23.11B	24.65B	19.01B	18.30B	16.24B	16.98B
Cash, Cash Equivalents and Short-Term Investments	5.83B	6.25B	5.78B	4.94B	4.57B	5.14B
Total Debt	667.98M	8.20B	5.50B	5.67B	4.83B	5.33B
Total Liabilities	22.32B	23.46B	17.74B	17.07B	15.15B	16.02B
Stockholders Equity	720.68M	1.07B	1.24B	1.13B	801.00M	669.61M
Cash Flow
Free Cash Flow	1.45B	1.66B	1.12B	863.28M	307.96M	310.07M
Operating Cash Flow	1.98B	2.13B	1.34B	1.05B	387.20M	707.33M
Investing Cash Flow	-1.88B	-1.49B	-249.67M	-484.59M	-220.00M	647.75M
Financing Cash Flow	-284.41M	346.11M	-583.61M	-167.20M	-1.08B	-632.14M

Hochtief Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 249.00
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For DE:HOT, the sentiment is Neutral. The current price of 249 is above the 20-day moving average (MA) of 248.56, above the 50-day MA of 233.97, and above the 200-day MA of 178.95, indicating a neutral trend. The MACD of 6.85 indicates Positive momentum. The RSI at 49.04 is Neutral, neither overbought nor oversold. The STOCH value of 17.83 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for DE:HOT.

Hochtief Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
GBF	76 Outperform	€3.50B	18.91	15.17%	2.19%	11.94%	-14.70%
HOT	68 Neutral	€18.36B	22.84	108.18%	2.10%	25.95%	17.64%
G1A	66 Neutral	€9.92B	25.46	17.92%	1.83%	1.93%	2.27%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%
HLE	63 Neutral	€9.27B	47.35	6.30%	1.16%	-0.29%	-41.38%
KGX	54 Neutral	€7.19B	31.96	3.89%	1.50%	-2.50%	-32.31%
TKA	51 Neutral	€6.05B	―	-12.35%	1.27%	-4.77%	49.72%