Hochtief (HOT) AI Stock Analysis

• Market Cap: €26.20B
• Dividend Yield: 1.58%
• Average Volume (3M): 64.14K
• Price to Earnings (P/E): 30.7
• Beta (1Y): 1.25
• Revenue Growth: 22.16%
• EPS Growth: 18.23%
• Country: DE
• Employees: 54,035
• Sector: Industrials
• Sector Strength: 72
• Industry: Engineering & Construction
• EPS (TTM): 2.32
• Shares Outstanding: 77,711,300
• 10 Day Avg. Volume: 65,004
• 30 Day Avg. Volume: 64,141
• PEG Ratio: 0.26
• Price to Book (P/B): 9.10
• Price to Sales (P/S): 0.29
• P/FCF Ratio: 5.89
• 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: €293.90
• Price Target Upside: -16.22% Downside
• Rating Consensus: Moderate Sell
• Number of Analyst Covering: 3
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 69 Neutral
• Price Target: €399.00 ▲(13.74% Upside)

Hochtief's stock is supported by strong technical indicators, reflecting positive market momentum. However, financial performance is hindered by high leverage and low profitability, and the valuation suggests the stock may be overvalued. These factors combined result in a moderate overall stock score.

Positive Factors

Revenue Growth

Sustained revenue growth above 20% indicates durable demand for Hochtief's construction and project development services across geographies. Over 2-6 months this supports a stronger backlog, better utilization of capabilities, and scale advantages in bidding and execution for large infrastructure projects.

Stable Gross Margins

Consistent ~26% gross margins reflect enduring project execution efficiency and cost control in construction operations. This margin stability supports long-term competitive pricing power on complex projects and resilience to input cost variability, underpinning sustainable operating performance.

Free Cash Flow Generation

Positive FCF growth and a healthy FCF-to-net-income ratio show the business converts earnings into cash at a reliable rate. Over months, this underpins reinvestment in project development, concession assets and deleveraging flexibility, bolstering financial resilience through project cycles.

Negative Factors

High Leverage

Very high debt relative to equity creates structural financing risk: interest burden and refinancing exposure can constrain investment choices and raise vulnerability to rate shocks. Over the medium term, leverage limits strategic flexibility and raises downside sensitivity in cyclic construction markets.

Low Net Profitability

A low net margin around 2% implies limited earnings retained from revenue after costs and financing. Structurally, this reduces capacity to self-fund growth, cushions against project cost overruns, and weakens the company's buffer versus cyclical downturns and inflationary pressures in construction.

Weak Cash Conversion of Earnings

Low operating cash conversion suggests earnings are not readily translating into operating cash, reflecting working capital or timing on contracts. Over months, this can strain liquidity, complicate funding of large projects, and increase reliance on external financing despite reported FCF metrics.

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 activities, which include building, civil engineering, and special construction projects. The company earns money by undertaking large-scale projects, often funded by public and private sector contracts, where it acts as the main contractor or subcontractor. Significant revenue streams also come from its project development segment, where Hochtief develops real estate and manages infrastructure projects. Additionally, the concessions business allows the company to invest in, operate, and maintain infrastructure assets, generating long-term revenue through tolls, fees, or service contracts. Hochtief's partnerships with other construction firms, governments, and private entities further enhance its project capabilities and revenue opportunities. Economic conditions, government spending on infrastructure, and construction market dynamics significantly impact the company's earnings.

Hochtief Financial Statement Overview

Summary

Hochtief shows solid revenue growth and efficient cost management, but faces challenges with low net margins and high leverage. Strong returns on equity are a positive, but the company must address leverage and profitability concerns to enhance financial stability.

Income Statement

Hochtief has demonstrated consistent revenue growth, with a 2.2% increase in TTM. Gross profit margins have remained stable around 26%, indicating efficient cost management. However, the net profit margin is relatively low at 2.2%, suggesting room for improvement in profitability. The EBIT and EBITDA margins show moderate operational efficiency, but the decline in EBIT from previous years is a concern.

Balance Sheet

The company has a high debt-to-equity ratio of 9.96, indicating significant leverage, which poses a financial risk. Return on equity is strong at 87.6%, reflecting effective use of equity to generate profits. However, the equity ratio is low, suggesting reliance on debt financing, which could impact financial stability.

Cash Flow

Hochtief's free cash flow has grown by 4.8% in the TTM, showing positive cash generation. The operating cash flow to net income ratio is low at 0.14, indicating potential challenges in converting income into cash. The free cash flow to net income ratio is healthy at 0.73, suggesting good cash flow management relative to earnings.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	37.83B	33.30B	27.76B	26.22B	21.38B	22.95B
Gross Profit	7.96B	8.78B	6.85B	6.32B	5.29B	5.55B
EBITDA	2.35B	2.03B	1.07B	968.99M	747.04M	1.67B
Net Income	852.34M	775.63M	522.75M	481.77M	293.40M	427.24M
Balance Sheet
Total Assets	23.59B	24.65B	19.01B	18.30B	16.24B	16.98B
Cash, Cash Equivalents and Short-Term Investments	5.62B	6.25B	5.78B	4.94B	4.57B	5.14B
Total Debt	8.37B	8.20B	5.50B	5.67B	4.83B	5.33B
Total Liabilities	22.51B	23.46B	17.74B	17.07B	15.15B	16.02B
Stockholders Equity	983.02M	1.07B	1.24B	1.13B	801.00M	669.61M
Cash Flow
Free Cash Flow	1.52B	1.66B	1.12B	863.28M	307.96M	310.07M
Operating Cash Flow	2.07B	2.13B	1.34B	1.05B	387.20M	707.33M
Investing Cash Flow	-1.86B	-1.49B	-249.67M	-484.59M	-220.00M	647.75M
Financing Cash Flow	-327.94M	346.11M	-583.61M	-167.20M	-1.08B	-632.14M

Hochtief Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 350.80
• 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:HOT, the sentiment is Neutral. The current price of 350.8 is below the 20-day moving average (MA) of 359.87, above the 50-day MA of 340.35, and above the 200-day MA of 240.90, indicating a neutral trend. The MACD of 3.82 indicates Positive momentum. The RSI at 49.29 is Neutral, neither overbought nor oversold. The STOCH value of 43.33 is Neutral, 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	74 Outperform	€4.54B	24.48	14.63%	1.93%	10.17%	-20.99%
HOT	69 Neutral	€26.20B	30.74	100.05%	1.58%	22.16%	18.23%
KGX	69 Neutral	€7.82B	28.75	4.56%	1.23%	-2.20%	-18.16%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%
HLE	62 Neutral	€9.43B	58.42	5.24%	1.17%	<0.01%	-50.97%
G1A	61 Neutral	€9.99B	24.93	17.71%	2.01%	2.26%	6.49%
TKA	58 Neutral	€6.78B	14.58	4.81%	1.23%	-6.29%	―