Kontron AG (KTN) AI Stock Analysis

• Market Cap: €1.56B
• Dividend Yield: 2.52%
• Average Volume (3M): 215.28K
• Price to Earnings (P/E): 10.5
• Beta (1Y): 0.60
• Revenue Growth: 16.68%
• EPS Growth: 79.64%
• Country: DE
• Employees: 4,475
• Sector: Technology
• Sector Strength: 86
• Industry: Computer Hardware
• EPS (TTM): 1.12
• Shares Outstanding: 66,096,100
• 10 Day Avg. Volume: 178,491
• 30 Day Avg. Volume: 215,278
• 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: €28.47
• Price Target Upside: 14.34% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 3

• Rating: 69 Neutral
• Price Target: €27.00 ▲(8.43% Upside)

Kontron AG's overall stock score reflects its strong financial performance and attractive valuation. The company's robust cash flow and improved leverage position it well for future growth, despite recent revenue declines. Technical analysis indicates potential short-term weakness, but the stock's low P/E ratio and solid dividend yield enhance its long-term investment appeal.

Positive Factors

Financial Performance

The underlying EBITDA margin improves once again to a strong 12.6%.

Investor Confidence

The stock’s strong year-to-date performance reflects investor confidence in Kontron's positioning across 5G.

Negative Factors

Quarterly Sales

4Q24 sales at €477m came in 13% below consensus expectations.

Sales Performance

Sales were down 7% year-over-year partially due to the phase-out of unprofitable EMS business from Katek and the JUMPtec deconsolidation.

Kontron AG Business Overview & Revenue Model

Company Description

Kontron AG is a IoT technology company, which provides support for the industries to achieve their business goals with intelligent solutions. The company offers value-adding technologies to customers through its automated industrial processes, smarter and safer transportation to advanced communication, medical and energy solutions. The company was founded by Hermann Oberlehner in 1990 and is headquartered in Linz, Austria.

How the Company Makes Money

Kontron AG generates revenue primarily through the sale of embedded computing products and solutions, including hardware, software, and services. Key revenue streams include the direct sale of embedded systems, custom hardware solutions, and related software licensing. The company also earns income from long-term service contracts and maintenance agreements. Strategic partnerships with key players in industries such as telecommunications and industrial automation enhance its market reach and contribute to consistent revenue growth. Additionally, Kontron benefits from recurring revenue through IoT service offerings, leveraging its expertise in connectivity and data management.

Kontron AG Financial Statement Overview

Summary

Kontron AG presents a strong financial profile with impressive revenue growth and stable profitability. The balance sheet is well-structured, though slightly high leverage could be a concern. Cash flow management is effective, with room for further improvement in free cash flow generation.

Income Statement

Kontron AG has shown a strong revenue growth trajectory with a notable increase of 37.4% from the previous year. The gross profit margin stands at 22.7%, reflecting a solid ability to maintain cost efficiency. The net profit margin improved to 5.4%, indicating enhanced profitability. EBIT and EBITDA margins are healthy at 6.8% and 11.8% respectively, showing effective operational management. However, there is room for improvement in profitability margins compared to industry leaders.

Balance Sheet

The balance sheet reflects a stable equity base with a debt-to-equity ratio of 0.96, indicating moderate leverage. Return on equity (ROE) is 14.3%, showcasing efficient use of shareholder capital. The equity ratio stands at 34.7%, suggesting a balanced approach to financing. While the company maintains a solid financial structure, the debt levels are slightly higher, which could pose risks if interest rates rise.

Cash Flow

Free cash flow growth has been robust, with significant generation from operations. The operating cash flow to net income ratio is 1.09, reflecting strong cash conversion capability. The free cash flow to net income ratio is 0.31, indicating positive cash generation, although capital expenditures have impacted free cash flow levels. Overall, the company demonstrates good cash flow management, though there is potential to enhance free cash flow further.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	1.69B	1.68B	1.23B	1.10B	1.34B	1.25B
Gross Profit	373.96M	383.04M	258.27M	183.80M	264.20M	200.11M
EBITDA	257.83M	198.15M	134.90M	47.08M	93.15M	133.38M
Net Income	141.69M	90.69M	77.71M	-12.83M	48.26M	55.61M
Balance Sheet
Total Assets	1.81B	1.82B	1.37B	1.44B	1.35B	1.25B
Cash, Cash Equivalents and Short-Term Investments	240.38M	314.82M	330.04M	548.23M	300.00M	279.77M
Total Debt	448.07M	610.45M	264.68M	362.72M	381.22M	329.82M
Total Liabilities	1.12B	1.17B	766.69M	805.19M	928.87M	837.16M
Stockholders Equity	673.15M	632.46M	601.96M	633.84M	418.56M	404.04M
Cash Flow
Free Cash Flow	59.31M	27.76M	70.58M	3.95M	48.29M	106.89M
Operating Cash Flow	132.02M	98.98M	116.86M	44.44M	95.28M	140.81M
Investing Cash Flow	-67.52M	-127.09M	25.73M	143.67M	-66.32M	-77.18M
Financing Cash Flow	-88.14M	10.95M	-190.22M	-90.78M	-11.28M	-65.78M

Kontron AG Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 24.90
• 50DMA: Negative
• 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:KTN, the sentiment is Positive. The current price of 24.9 is below the 20-day moving average (MA) of 25.34, below the 50-day MA of 25.93, and above the 200-day MA of 21.78, indicating a neutral trend. The MACD of -0.62 indicates Positive momentum. The RSI at 45.42 is Neutral, neither overbought nor oversold. The STOCH value of 29.07 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for DE:KTN.

Kontron AG Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
KTN	69 Neutral	€1.56B	10.46	21.98%	2.52%	16.68%	79.64%
Sector *	61 Neutral	$36.05B	6.66	-10.61%	1.86%	8.68%	-8.81%
0ZPV	―	€1.00B	13.01	7.86%	1.35%	―	―
0FH7	―	€1.25B	222.22	1.42%	0.89%	―	―
0FQR	―	€1.54B	49.21	5.47%	―	―	―
HYI	―	€24.73M	―		0.74%	―	―
MUB	―	€623.83M	46.13	5.11%	3.44%	―	―