Valeo (FR) AI Stock Analysis

• Market Cap: €2.91B
• Dividend Yield: 3.86%
• Average Volume (3M): 906.71K
• Price to Earnings (P/E): 23.3
• Beta (1Y): 1.85
• Revenue Growth: -4.16%
• EPS Growth: -48.55%
• Country: FR
• Employees: 106,100
• Sector: Industrials
• Sector Strength: 72
• Industry: Auto - Parts
• EPS (TTM): 0.43
• Shares Outstanding: 244,633,500
• 10 Day Avg. Volume: 890,196
• 30 Day Avg. Volume: 906,708
• PEG Ratio: -0.53
• Price to Book (P/B): 0.61
• Price to Sales (P/S): 0.11
• P/FCF Ratio: 4.94
• 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: €12.34
• Price Target Upside: 13.31% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 9
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 59 Neutral
• Price Target: €11.00 ▲(1.01% Upside)

Valeo's overall stock score is primarily influenced by its solid financial performance, which indicates effective cost management and positive revenue trends. However, technical analysis suggests bearish momentum, and the high P/E ratio raises valuation concerns. The dividend yield provides some compensation for these risks.

Positive Factors

Innovation in Mobility Solutions

Valeo's focus on innovative mobility solutions positions it well for future growth, as the automotive industry increasingly values sustainability and smart technologies.

Strong Cash Flow

Robust cash flow indicates efficient cash generation, providing Valeo with the flexibility to invest in growth opportunities and manage debt effectively.

Effective Cost Management

Improving gross profit margins suggest Valeo's ability to manage costs effectively, enhancing profitability and competitive positioning in the long term.

Negative Factors

Revenue Decline

A decline in revenue growth poses challenges for Valeo, potentially impacting its ability to scale operations and maintain market share in a competitive industry.

Increased Leverage

Higher leverage can limit financial flexibility and increase risk, especially if cash flow constraints arise, impacting Valeo's long-term financial health.

Low Net Profit Margin

A low net profit margin indicates challenges in translating revenue into profit, which could hinder Valeo's ability to invest in growth and innovation.

Valeo Business Overview & Revenue Model

Company Description

Valeo SE designs, produces, and sells components, systems, and services for automakers in France, other European countries, Africa, North America, South America, and Asia. The company operates through four segments: Comfort & Driving Assistance Systems, Powertrain Systems, Thermal Systems, and Visibility Systems. It offers parking and driving assistance products, such as ultrasonic sensors, radars, and cameras to detect obstacles around vehicles; intuitive control products; and a range of connectivity solutions from short-range to long-range connectivity, as well as develops systems that enable the integration of applications, such as car sharing services and remote parking systems. The company also provides powertrain systems, including electric powertrain systems for electric cars; torque converters, dual dry and wet clutches, and actuators that enable the automation of transmissions to reduce fuel consumption and enhance driving comfort; and clean engines for vehicles. In addition, it designs and manufactures systems, modules, and components to optimize thermal management of vehicles and passenger comfort in the cabin, including heating ventilation and air conditioning systems. Further, the company designs and produces lighting and wiper systems for drivers in various weather conditions. Additionally, it offers original equipment spares to auto manufacturers; and replacement parts and accessories to independent aftermarket for passenger cars and commercial vehicles. The company was incorporated in 1923 and is headquartered in Paris, France.

How the Company Makes Money

Valeo generates revenue primarily through the sale of automotive components and systems to car manufacturers and aftermarket services. Their business model includes long-term contracts with major automotive OEMs (Original Equipment Manufacturers), which provide a steady stream of income. Key revenue streams come from the sale of products related to the electrification of vehicles, thermal management, visibility systems, and advanced driving assistance technologies. Additionally, Valeo benefits from partnerships with leading car manufacturers and collaborations in research and development, particularly in the growing sectors of electric vehicles and autonomous driving technologies, which contribute to its financial growth and market presence.

Valeo Financial Statement Overview

Summary

Valeo demonstrates a solid financial standing with positive trends in revenue growth, profitability, and cash generation. The company has effectively managed costs, leading to improved margins. While leverage has increased, it remains controlled. Continued focus on profitability and cash flow enhancement will be crucial for sustaining long-term growth and financial health.

Income Statement

Valeo has shown strong revenue growth over the years with a notable recovery from the 2020 downturn. The gross profit margin is healthy and improving, indicating effective cost management. The net profit margin is relatively low, but positive trends in EBIT and EBITDA margins suggest operational improvements. Overall, the income statement reflects a positive trajectory with room for enhanced profitability.

Balance Sheet

The company's debt-to-equity ratio has increased slightly, indicating higher leverage, but remains within industry norms. The return on equity shows moderate profitability. The equity ratio is stable, reflecting a balanced asset structure. The balance sheet indicates a sound financial position with manageable debt levels, although further equity strengthening could reduce leverage risks.

Cash Flow

Operating cash flow is strong, consistently exceeding net income, which is a positive indicator of cash generation efficiency. Free cash flow has grown, but the free cash flow to net income ratio suggests potential constraints on cash availability for reinvestment or debt reduction. Overall, cash flows are robust but could benefit from improved free cash flow margins.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	21.04B	21.49B	22.04B	20.04B	17.26B	16.44B
Gross Profit	4.12B	4.08B	3.95B	2.58B	2.29B	1.49B
EBITDA	2.00B	2.63B	2.66B	2.35B	2.36B	778.00M
Net Income	125.00M	162.00M	221.00M	230.00M	175.00M	-1.09B
Balance Sheet
Total Assets	20.37B	21.66B	21.76B	22.03B	18.84B	18.85B
Cash, Cash Equivalents and Short-Term Investments	2.42B	3.15B	3.14B	3.41B	2.48B	3.05B
Total Debt	6.59B	7.04B	7.07B	7.28B	5.83B	6.08B
Total Liabilities	16.42B	17.14B	17.40B	17.30B	14.24B	14.76B
Stockholders Equity	3.18B	3.72B	3.58B	3.82B	3.69B	3.23B
Cash Flow
Free Cash Flow	1.53B	463.00M	461.00M	319.00M	249.00M	287.00M
Operating Cash Flow	2.50B	2.69B	2.46B	1.81B	1.60B	1.76B
Investing Cash Flow	-1.80B	-1.95B	-1.91B	-1.93B	-1.57B	-1.65B
Financing Cash Flow	-848.00M	-524.00M	-788.00M	962.00M	-613.00M	1.14B

Valeo Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 10.89
• 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 FR:FR, the sentiment is Neutral. The current price of 10.89 is below the 20-day moving average (MA) of 11.65, below the 50-day MA of 11.12, and above the 200-day MA of 9.82, indicating a neutral trend. The MACD of -0.18 indicates Positive momentum. The RSI at 42.98 is Neutral, neither overbought nor oversold. The STOCH value of 27.47 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for FR:FR.

Valeo Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
FII	73 Outperform	€2.11B	33.66	6.49%	0.80%	9.17%	12.78%
ML	67 Neutral	$20.00B	12.75	8.49%	4.90%	-3.62%	-17.91%
OPM	67 Neutral	€2.02B	12.69	7.91%	4.09%	-0.29%	-1.66%
AKW	65 Neutral	€282.70M	16.11	2.91%	7.35%	-8.58%	-52.26%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%
FR	59 Neutral	€2.91B	23.34	3.67%	3.86%	-4.16%	-48.55%
FRVIA	55 Neutral	€2.21B	-4.82	-11.30%	4.13%	-0.90%	-324.34%