Kontron AG (KTN) AI Stock Analysis

• Market Cap: €1.80B
• Dividend Yield: 2.15%
• Average Volume (3M): 191.91K
• Price to Earnings (P/E): 18.5
• Beta (1Y): 0.59
• Revenue Growth: 31.41%
• EPS Growth: 24.30%
• Country: DE
• Employees: 4,475
• Sector: Industrials
• Sector Strength: 90
• Industry: Computer Hardware
• EPS (TTM): 0.33
• Shares Outstanding: 66,096,100
• 10 Day Avg. Volume: 209,936
• 30 Day Avg. Volume: 191,905
• PEG Ratio: 3.12
• Price to Book (P/B): 2.18
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 48.02
• 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: €29.35
• Price Target Upside: 3.56% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 4

• Rating: 79 Outperform
• Price Target: €31.00 ▲(9.39%Upside)

Kontron AG receives a strong overall score due to solid financial performance and robust technical indicators. The company's impressive revenue growth and stable profitability are key strengths. Technical analysis shows bullish momentum across multiple indicators, supporting positive market sentiment. Valuation is fair with an attractive dividend yield. The absence of earnings call insights and corporate events did not impact the score due to the redistribution of weights.

Positive Factors

Dividends

The proposed dividend increased by 20% YoY to €0.60 per share.

Earnings

EBITDA at €48m saw particularly strong growth, sitting 19% above the company-compiled consensus.

Financial Performance

The quality of sales improved significantly, lifting the gross margin to 44.0%.

Negative Factors

Market Expectations

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

Operational Challenges

The final quarter turned out to be more challenging than expected mainly due to the prolonged slow-down in solar and some delays in wall box deliveries.

Kontron AG Business Overview & Revenue Model

Company Description

Kontron AG, headquartered in Augsburg, Germany, is a global leader in embedded computing technology and Internet of Things (IoT) solutions. The company operates primarily within the technology and industrial sectors, offering a comprehensive range of products and services including embedded computer boards, modules, and systems. Kontron's offerings are utilized in a variety of applications across industries such as industrial automation, telecommunications, transportation, and healthcare, providing innovative solutions that enhance operational efficiency and connectivity.

How the Company Makes Money

Kontron AG generates revenue through the sale of its embedded computing products and IoT solutions. The company's revenue model is based on the production and distribution of high-performance computing boards, modules, and systems that are integrated into various industrial applications. Key revenue streams include direct sales to industrial clients, OEM partnerships, and strategic collaborations with technology providers to incorporate Kontron's solutions into broader systems. Additionally, Kontron benefits from service contracts and maintenance agreements, which provide recurring income. The company's strong focus on innovation and its ability to tailor solutions to specific industry needs are significant factors driving its financial performance.

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	1.71B	1.68B	1.23B	1.10B	1.34B	1.25B
Gross Profit	409.61M	383.04M	258.27M	183.80M	264.20M	200.11M
EBITDA	209.59M	198.15M	134.90M	47.08M	93.15M	133.38M
Net Income	94.47M	90.69M	77.71M	-12.83M	48.26M	55.61M
Balance Sheet
Total Assets	1.37B	1.82B	1.37B	1.44B	1.35B	1.25B
Cash, Cash Equivalents and Short-Term Investments	330.04M	314.82M	330.04M	548.23M	300.00M	279.77M
Total Debt	264.68M	610.45M	264.68M	362.72M	381.22M	329.82M
Total Liabilities	766.69M	1.17B	766.69M	805.19M	928.87M	837.16M
Stockholders Equity	601.96M	632.46M	601.96M	633.84M	418.56M	404.04M
Cash Flow
Free Cash Flow	30.47M	27.76M	70.58M	3.95M	48.29M	106.89M
Operating Cash Flow	107.61M	98.98M	116.86M	44.44M	95.28M	140.81M
Investing Cash Flow	-128.90M	-127.09M	25.73M	143.67M	-66.32M	-77.18M
Financing Cash Flow	-129.65M	10.95M	-190.22M	-90.78M	-11.28M	-65.78M

Kontron AG Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 28.34
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Negative
• STOCH: Negative

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 28.34 is above the 20-day moving average (MA) of 25.38, above the 50-day MA of 23.78, and above the 200-day MA of 20.26, indicating a bullish trend. The MACD of 1.08 indicates Negative momentum. The RSI at 72.02 is Negative, neither overbought nor oversold. The STOCH value of 94.98 is Negative, 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	79 Outperform	€1.80B	18.49	14.43%	2.15%	31.41%	24.30%
JEN	75 Outperform	€1.13B	13.60	9.13%	1.93%	1.39%	13.98%
Sector *	67 Neutral	€8.10B	20.81	6.46%	2.90%	1.89%	-38.99%
PFV	62 Neutral	€1.52B	40.40		4.74%	―	―
OHB	62 Neutral	€1.39B	364,000.00	<0.01%	0.85%	-2.53%	-99.99%