Honda Motor Company (HMC) AI Stock Analysis

• Market Cap: $52.49B
• Dividend Yield: 4.18%
• Average Volume (3M): 1.15M
• Price to Earnings (P/E): 11.4
• Beta (1Y): 0.62
• Revenue Growth: 1.68%
• EPS Growth: -39.28%
• Country: US
• Employees: 194,993
• Sector: Consumer Cyclical
• Sector Strength: 72
• Industry: Auto - Manufacturers
• EPS (TTM): 46.80
• Shares Outstanding: 1,760,000,000
• 10 Day Avg. Volume: 1,143,035
• 30 Day Avg. Volume: 1,153,998
• PEG Ratio: N/A
• Price to Book (P/B): 0.00
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 0.00
• Enterprise Value/Market Cap: 1.71
• Enterprise Value/Revenue: <0.01
• Enterprise Value/Gross Profit: 0.02
• Enterprise Value/Ebitda: 0.04
• 1Y Price Target: $37.00
• Price Target Upside: 13.15% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 1

• Rating: 75 Outperform
• Price Target: $37.00 ▲(13.15% Upside)

Honda's overall stock score is driven by strong technical indicators and a solid valuation, reflecting positive market momentum and reasonable pricing. However, financial performance is mixed, with robust income growth but challenges in cash flow management. The recent earnings call presented a cautious outlook due to operating profit declines and regional challenges, particularly in the automobile segment.

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 generates revenue primarily through the sale of its automotive and motorcycle products. The company's automotive division contributes a significant portion of its earnings, offering a wide range of vehicles from compact cars to SUVs and luxury models under the Acura brand. Additionally, Honda's motorcycle division is a leading player in the global market, providing a variety of motorcycles for different segments, including sport bikes and scooters. Other key revenue streams include sales of power equipment, such as generators and lawn mowers, as well as revenue from financing and leasing services offered through Honda Financial Services. Strategic partnerships with technology firms and investments in research and development further enhance Honda's competitive edge, allowing the company to innovate and diversify its offerings, which in turn drives sales and profitability.

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: 32.70
• 50DMA: Positive
• 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 HMC, the sentiment is Positive. The current price of 32.7 is above the 20-day moving average (MA) of 31.82, above the 50-day MA of 30.46, and above the 200-day MA of 28.46, indicating a bullish trend. The MACD of 0.52 indicates Positive momentum. The RSI at 58.18 is Neutral, neither overbought nor oversold. The STOCH value of 60.60 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
TM	77 Outperform	$245.19B	8.70	12.05%	2.86%	4.14%	-12.12%
HMC	75 Outperform	$52.49B	11.43	5.17%	4.18%	1.68%	-39.28%
GM	72 Outperform	$50.96B	8.49	7.07%	0.94%	5.34%	-28.29%
F	71 Outperform	$45.05B	14.44	7.11%	6.65%	2.72%	-17.58%
LI	68 Neutral	$24.64B	23.48	12.22%	―	10.28%	-29.75%
Sector *	61 Neutral	C$4.60B	8.21	13.40%	3.76%	3.56%	-0.43%
XPEV	53 Neutral	$19.25B	―	-15.52%	―	50.45%	49.81%