Honda Motor Company (HMC) AI Stock Analysis

• Market Cap: $48.59B
• Dividend Yield: 0.13%
• Average Volume (3M): 935.03K
• Price to Earnings (P/E): 8.5
• Beta (1Y): 0.58
• Revenue Growth: 0.83%
• EPS Growth: -26.70%
• Country: US
• Employees: 194,993
• Sector: Consumer Cyclical
• Sector Strength: 68
• Industry: Auto - Manufacturers
• EPS (TTM): 0.19
• Shares Outstanding: 1,760,000,000
• 10 Day Avg. Volume: 1,045,697
• 30 Day Avg. Volume: 935,028
• PEG Ratio: -0.42
• Price to Book (P/B): 0.55
• Price to Sales (P/S): 0.00
• P/FCF Ratio: -19.59
• 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: N/A
• Price Target Upside: N/A
• Rating Consensus: Hold
• Number of Analyst Covering: 0

• Rating: 72 Outperform
• Price Target: $33.00 ▲(8.52%Upside)

Honda's overall stock score of 72 reflects robust financial performance and attractive valuation, though technical indicators are mixed. The earnings call highlights significant strengths in the motorcycle segment and hybrid EV sales, but challenges persist in the automobile sector, exacerbated by tariff impacts and electrification strategy hurdles, warranting a cautious outlook.

Honda Motor Company Business Overview & Revenue Model

Company Description

Honda Motor Co., Ltd. develops, manufactures, and distributes motorcycles, automobiles, power products, and other products in Japan, North America, Europe, Asia, and internationally. It operates through four segments: Motorcycle Business, Automobile Business, Financial Services Business, and Life Creation and Other Businesses. The Motorcycle Business segment produces motorcycles, including sports, business, and commuter models; and various off-road vehicles, such as all-terrain vehicles and side-by-sides. The Automobile Business segment offers passenger cars, light trucks, and mini vehicles. The Financial Services Business segment provides various financial services, including retail lending and leasing services to customers, as well as wholesale financing services to dealers. The Life Creation and Other Businesses segment manufactures and sells power products, such as general purpose engines, generators, water pumps, lawn mowers, riding mowers, robotic mowers, brush cutters, tillers, snow blowers, outboard marine engines, walking assist devices, and portable battery inverter power sources. This segment also offers HondaJet aircraft. The company also sells spare parts; and provides after-sale services through retail dealers directly, as well as through independent distributors and licensees. Honda Motor Co., Ltd. was founded in 1946 and is headquartered in Tokyo, Japan.

How the Company Makes Money

Honda Motor Company generates revenue through various streams, with the automotive segment being the primary contributor to its earnings. This includes the sale of cars, trucks, and SUVs, with popular models such as the Honda Accord, Civic, and CR-V. The motorcycle sector is another significant source of revenue, where Honda leads the market with a diverse lineup catering to different regions and consumer preferences. Additionally, Honda's power products division, which includes engines, generators, and lawn equipment, contributes to its revenue. The company also engages in financial services, providing loans and leases to support vehicle sales. Strategic partnerships and joint ventures, particularly in the areas of research and development for next-generation technologies such as electric vehicles and autonomous driving, also play a role in Honda's revenue model.

Honda Motor Company Financial Statement Overview

Summary

Honda Motor Company exhibits strong financial health with consistent income growth and solid balance sheet metrics. While profitability remains high, and leverage is managed well, cash flow volatility and rising liabilities present areas for improvement. The company is well-positioned in the auto manufacturing industry, but it must address cash flow management to sustain long-term growth.

Income Statement

Honda Motor Company has shown consistent revenue growth over the years, with a notable increase from 2021 to 2025. The gross profit margin and net profit margin remained stable, showcasing efficient cost management. Despite a slight decline in EBIT margin in 2025, the EBITDA margin indicates strong operational performance. Overall, the company demonstrates robust income-generating capability with healthy profitability.

Balance Sheet

Honda's balance sheet reflects a strong equity position, with the equity ratio showing a solid percentage of total assets funded by shareholders' equity. The debt-to-equity ratio has decreased over time, indicating improved leverage management. Return on equity is steady, reflecting efficient utilization of shareholder funds. However, there is a potential risk from total liabilities, which have increased alongside assets, suggesting a need for cautious financial management.

Cash Flow

The cash flow analysis shows volatility in free cash flow, with a significant decline in 2025 due to increased capital expenditures. Operating cash flow remains positive but has decreased compared to previous years. The operating cash flow to net income ratio indicates effective cash generation relative to net income, though the decreasing trend suggests potential cash flow challenges. Overall, Honda's cash flow management is satisfactory but requires attention to maintain stability.

Breakdown	Mar 2025	Mar 2024	Mar 2023	Mar 2022	Mar 2021
Income Statement
Total Revenue	21.69T	20.43T	16.91T	14.55T	13.17T
Gross Profit	4.66T	4.26T	3.33T	2.98T	2.73T
EBITDA	2.12T	3.17T	2.40T	2.36T	2.08T
Net Income	835.84B	1.11T	651.42B	707.07B	657.42B
Balance Sheet
Total Assets	30.78T	29.77T	24.67T	23.97T	21.92T
Cash, Cash Equivalents and Short-Term Investments	4.74T	5.18T	4.07T	3.89T	3.05T
Total Debt	4.42T	10.08T	7.67T	8.05T	7.72T
Total Liabilities	18.15T	16.77T	13.12T	13.20T	12.55T
Stockholders Equity	12.33T	12.70T	11.23T	10.47T	9.08T
Cash Flow
Free Cash Flow	-555.28B	138.61B	1.50T	1.23T	521.24B
Operating Cash Flow	292.15B	747.28B	2.13T	1.68T	1.07T
Investing Cash Flow	-941.97B	-867.27B	-678.06B	-376.06B	-796.88B
Financing Cash Flow	280.48B	918.65B	-1.47T	-615.72B	-283.98B

Honda Motor Company Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 30.41
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For HMC, the sentiment is Positive. The current price of 30.41 is above the 20-day moving average (MA) of 29.92, above the 50-day MA of 29.71, and above the 200-day MA of 28.35, indicating a bullish trend. The MACD of 0.28 indicates Negative momentum. The RSI at 54.39 is Neutral, neither overbought nor oversold. The STOCH value of 37.23 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for HMC.

Honda Motor Company Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
F	77 Outperform	$44.38B	8.94	11.47%	6.70%	3.03%	28.54%
LI	74 Outperform	$31.80B	28.89	12.22%	―	10.28%	-29.75%
HMC	72 Outperform	$48.59B	8.52	6.54%	0.13%	0.83%	-26.70%
TM	70 Outperform	$222.46B	7.15	13.36%	0.02%	1.06%	-7.05%
GM	64 Neutral	$51.17B	7.67	7.07%	1.29%	5.34%	-28.29%
Sector *	63 Neutral	$17.14B	11.30	-7.23%	3.13%	1.68%	-25.24%
XPEV	51 Neutral	$17.45B	―	-15.52%	―	50.45%	49.81%