Novem Group SA (NVM) AI Stock Analysis

• Market Cap: €133.39M
• Dividend Yield: N/A
• Average Volume (3M): 13.14K
• Price to Earnings (P/E): 7.3
• Beta (1Y): -0.11
• Revenue Growth: -9.08%
• EPS Growth: -34.48%
• Country: DE
• Employees: 4,887
• Sector: Consumer Cyclical
• Sector Strength: 84
• Industry: Auto - Parts
• EPS (TTM): 0.06
• Shares Outstanding: 43,030,304
• 10 Day Avg. Volume: 25,748
• 30 Day Avg. Volume: 13,140
• PEG Ratio: -0.24
• Price to Book (P/B): 1.93
• Price to Sales (P/S): 0.34
• P/FCF Ratio: 7.62
• 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: €3.50
• Price Target Upside: 17.06% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 1
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 59 Neutral
• Price Target: €3.00 ▲(0.33% Upside)

Novem Group SA's overall score reflects stable financial performance and attractive valuation, offset by technical weakness and high leverage. The stock's undervaluation and strong cash flow are positive, but bearish technical indicators and revenue challenges weigh on the score.

Positive Factors

Premium product niche & OEM contracts

Novem's focus on high-end decorative and functional cabin trims for OEMs is a durable competitive advantage: premium materials and module integration create higher content-per-vehicle, foster long-term, program-specific sourcing awards, and support pricing power and customer stickiness over vehicle cycles.

Strong margins and operational efficiency

Sustained gross and mid-single-digit operating margins reflect value-added product mix and manufacturing efficiency. These margin levels help absorb volume swings, fund R&D and tooling for new programs, and underpin long-term profitability even if revenue growth is uneven.

Robust free cash flow generation

A 48.1% FCF growth rate and solid FCF/net income ratio indicate improving cash conversion. Durable cash generation increases financial flexibility to fund tooling, support program launches, invest in capability upgrades, or reduce debt without relying on external financing.

Negative Factors

High leverage

A previously reported debt/equity of 2.73 signals material financial leverage. Elevated debt levels constrain strategic flexibility, increase sensitivity to cyclical OEM demand and interest costs, and elevate refinancing and covenant risk during automotive industry downturns.

Revenue contraction

Negative revenue growth suggests lost program volumes, weaker OEM demand or timing gaps in program ramps. Persistent top-line declines erode operating leverage, pressure margins and cash flow, and complicate investment in new program qualifications and capex over the medium term.

Earnings volatility / EPS decline

A steep EPS decline signals earnings volatility likely tied to program phasing, mix shifts or cost pressures. Large EPS swings reduce retained earnings for reinvestment, weaken credit metrics, and increase uncertainty about the company's ability to sustain investments and deleveraging plans.

Novem Group SA Business Overview & Revenue Model

Company Description

Novem Group S.A. develops and supplies trim elements and decorative function elements in car interiors for automotive industry in Luxembourg and internationally. The company's products portfolio includes instrument panels, impact-resistant trim parts in center console, door trims, and beltlines or dashboards. Novem Group S.A. was founded in 1947 and is based in Contern, Luxembourg.

How the Company Makes Money

Novem Group SA generates revenue primarily through the sale of its high-performance materials and components to automotive manufacturers and industrial clients. The company's revenue model is built on long-term contracts with major automotive brands, which provide a steady stream of income. Additionally, Novem benefits from partnerships with key industry players, allowing it to leverage shared resources and co-develop innovative products. The company also invests in research and development to create cutting-edge solutions that meet market demands, further driving its revenue growth. Factors such as increasing demand for lightweight materials and sustainable manufacturing practices contribute to Novem's earnings, as clients seek to improve efficiency and reduce their environmental footprint.

Novem Group SA Financial Statement Overview

Summary

Novem Group SA shows stable profitability and strong cash flow metrics, with a robust free cash flow growth rate of 48.1%. However, revenue growth challenges and high leverage pose risks.

Income Statement

Novem Group SA's income statement shows mixed performance. The TTM data indicates a decline in revenue growth by 2.6%, reflecting challenges in maintaining sales momentum. However, the company maintains a healthy gross profit margin of 41.2% and a net profit margin of 4.7%, indicating efficient cost management. The EBIT and EBITDA margins are also reasonable at 10.8% and 16.8%, respectively, suggesting operational efficiency. Despite the revenue decline, profitability metrics remain stable, which is a positive sign.

Balance Sheet

The balance sheet reveals a high debt-to-equity ratio, previously at 2.73, indicating significant leverage, which poses a risk in volatile markets. However, the TTM data shows an improvement with no reported debt-to-equity ratio, suggesting potential debt reduction or equity increase. The return on equity is strong at 26.9%, reflecting effective use of shareholder funds. The equity ratio is not provided, but the overall leverage remains a concern.

Cash Flow

Cash flow analysis shows a robust free cash flow growth rate of 48.1% in the TTM, indicating improved cash generation capabilities. The operating cash flow to net income ratio of 0.30 and free cash flow to net income ratio of 0.64 suggest that the company is generating sufficient cash relative to its net income. This strong cash flow position enhances financial flexibility and supports future investments or debt reduction.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	516.44M	541.46M	635.51M	700.30M	614.63M	602.72M
Gross Profit	212.76M	271.45M	97.24M	338.12M	316.10M	305.96M
EBITDA	83.33M	77.08M	99.69M	113.05M	100.84M	109.70M
Net Income	18.27M	11.13M	34.78M	49.98M	43.97M	9.73M
Balance Sheet
Total Assets	546.89M	568.07M	616.21M	638.01M	594.04M	629.95M
Cash, Cash Equivalents and Short-Term Investments	153.41M	150.10M	141.51M	165.47M	116.97M	175.30M
Total Debt	250.54M	298.34M	257.21M	257.31M	283.95M	895.89M
Total Liabilities	450.97M	474.13M	526.32M	530.75M	526.39M	1.14B
Stockholders Equity	95.92M	93.94M	89.89M	107.26M	67.66M	-505.09M
Cash Flow
Free Cash Flow	38.44M	23.83M	36.66M	80.39M	61.95M	86.48M
Operating Cash Flow	50.58M	41.35M	52.75M	98.33M	80.54M	105.51M
Investing Cash Flow	-11.23M	-12.85M	-10.02M	-13.78M	-15.49M	-15.77M
Financing Cash Flow	-13.11M	-18.70M	-60.86M	-35.55M	-124.89M	-110.70M

Novem Group SA Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 2.99
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For DE:NVM, the sentiment is Positive. The current price of 2.99 is below the 20-day moving average (MA) of 3.08, above the 50-day MA of 2.90, and below the 200-day MA of 3.58, indicating a neutral trend. The MACD of 0.05 indicates Positive momentum. The RSI at 55.87 is Neutral, neither overbought nor oversold. The STOCH value of 44.21 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for DE:NVM.

Novem Group SA Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
PWO	72 Outperform	€83.75M	7.26	7.17%	5.91%	-4.01%	-10.36%
Sector *	61 Neutral	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%
NVM	59 Neutral	€133.39M	7.28	19.67%	―	-9.08%	-34.48%
ZIL2	46 Neutral	€269.91M	-2.31	-16.55%	3.51%	-6.21%	-995.53%
GMM	46 Neutral	€96.85M	6.48	9.81%	―	-10.08%	―
BDT	45 Neutral	€194.23M	-3.57	-16.04%	1.38%	-17.63%	30.27%
ED4	42 Neutral	€94.25M	-1.54	-47.18%	10.96%	-13.53%	-394.79%