Honda Motor Company (HMC) AI Stock Analysis

• Market Cap: $39.75B
• Dividend Yield: 4.29%
• Average Volume (3M): 946.97K
• Price to Earnings (P/E): 9.8
• Beta (1Y): 0.64
• Revenue Growth: 0.34%
• EPS Growth: -25.49%
• Country: US
• Employees: 194,993
• Sector: Consumer Cyclical
• Sector Strength: 84
• Industry: Auto - Manufacturers
• EPS (TTM): 0.57
• Shares Outstanding: 1,760,000,000
• 10 Day Avg. Volume: 874,400
• 30 Day Avg. Volume: 946,968
• PEG Ratio: -0.36
• Price to Book (P/B): 0.51
• Price to Sales (P/S): 0.29
• P/FCF Ratio: -11.41
• Enterprise Value/Market Cap: 2.41
• Enterprise Value/Revenue: <0.01
• Enterprise Value/Gross Profit: 0.02
• Enterprise Value/Ebitda: 0.05
• 1Y Price Target: N/A
• Price Target Upside: N/A
• Rating Consensus: N/A
• Number of Analyst Covering: 0
• EPS Forecast (FY): 2.58
• Revenue Forecast (FY): $139.80B

• Rating: 73 Outperform
• Price Target: $35.00 ▲(15.51% Upside)

Honda Motor Company's overall stock score reflects a strong financial foundation and attractive valuation, which are offset by technical indicators suggesting potential short-term challenges. The upward revision of profit forecasts and a solid dividend yield are positive, but ongoing issues in the automobile segment and external challenges like tariffs and currency effects weigh on the outlook.

Positive Factors

Motorcycle Segment Profitability

Honda's motorcycle segment shows strong profitability, driven by sales expansion in key markets like Brazil and Vietnam, indicating robust demand and operational efficiency.

Revised Profit Forecast

An upward revision in profit forecasts suggests confidence in future performance, supported by strategic initiatives and market conditions.

Tariff Easing

Easing tariffs will reduce costs for Honda, improving margins and competitiveness in the U.S. market, a key region for automotive sales.

Negative Factors

Automobile Segment Losses

Losses in the automobile segment, especially in China, highlight challenges in adapting to market demands and competitive pressures in key regions.

Cash Flow Volatility

Volatile cash flow due to increased capital expenditures could strain financial flexibility, affecting Honda's ability to invest in growth opportunities.

Rare Earth Supply Risks

Dependence on rare earths, controlled largely by China, poses a supply chain risk that could impact production and increase costs for Honda.

Honda Motor Company Business Overview & Revenue Model

Company Description

Honda Motor Company (HMC) is a multinational corporation headquartered in Japan, primarily engaged in the manufacturing of automobiles, motorcycles, and power equipment. Founded in 1948, Honda is renowned for its innovative engineering and commitment to quality, producing a diverse range of products that include cars, motorcycles, all-terrain vehicles, and generators. The company operates across multiple sectors, including mobility, power products, and robotics, and has a strong global presence with manufacturing plants and research facilities around the world.

How the Company Makes Money

Honda generates revenue through several key streams. The primary source of income is the sale of automobiles and motorcycles, which includes a wide range of models from economy cars to luxury vehicles and high-performance motorcycles. Additionally, Honda earns revenue from the production and sale of power equipment, such as lawnmowers and generators. The company also engages in financial services, providing financing solutions to customers and dealerships, thus generating interest income. Significant partnerships, such as collaborations with technology firms in electric vehicle development and autonomous driving, contribute to Honda's innovation and market competitiveness. Furthermore, Honda's focus on sustainability and investment in alternative energy solutions, like hydrogen fuel cells, are expected to enhance its earnings in the future.

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	TTM	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	21.52T	21.69T	20.43T	16.91T	14.55T	13.17T
Gross Profit	4.47T	4.66T	4.41T	3.33T	2.98T	2.73T
EBITDA	2.02T	2.12T	2.50T	1.64T	2.36T	2.08T
Net Income	652.98B	835.84B	1.11T	651.42B	707.07B	657.42B
Balance Sheet
Total Assets	31.49T	30.78T	29.77T	24.67T	23.97T	21.92T
Cash, Cash Equivalents and Short-Term Investments	4.84T	4.74T	5.18T	4.07T	3.89T	3.05T
Total Debt	0.00	4.42T	10.08T	7.62T	8.05T	6.74T
Total Liabilities	19.25T	18.15T	16.77T	13.17T	13.20T	12.55T
Stockholders Equity	11.96T	12.33T	12.70T	11.18T	10.47T	9.08T
Cash Flow
Free Cash Flow	-258.13B	-555.28B	138.61B	1.50T	1.23T	521.24B
Operating Cash Flow	589.32B	292.15B	747.28B	2.13T	1.68T	1.07T
Investing Cash Flow	-779.58B	-941.97B	-867.27B	-678.06B	-376.06B	-796.88B
Financing Cash Flow	62.29B	280.48B	918.65B	-1.47T	-615.72B	-283.98B

Honda Motor Company Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 30.30
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• 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 Negative. The current price of 30.3 is above the 20-day moving average (MA) of 29.72, below the 50-day MA of 30.63, and above the 200-day MA of 29.93, indicating a bearish trend. The MACD of -0.31 indicates Negative momentum. The RSI at 42.64 is Neutral, neither overbought nor oversold. The STOCH value of 57.64 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for HMC.

Honda Motor Company Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
TM	81 Outperform	$258.13B	8.42	12.51%	2.86%	7.30%	12.42%
GM	75 Outperform	$68.71B	14.80	4.44%	0.93%	2.58%	-46.27%
F	74 Outperform	$52.44B	11.28	10.26%	5.73%	3.75%	33.37%
HMC	73 Outperform	$39.75B	9.76	5.23%	4.29%	0.34%	-25.49%
TSLA	73 Outperform	$1.43T	286.81	7.03%	―	-1.56%	-59.09%
Sector *	61 Neutral	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%
LI	55 Neutral	$18.22B	31.22	6.28%	―	-12.18%	-56.78%

Honda Motor Company Corporate Events

Honda Motors’ Earnings Call: Mixed Sentiments and Challenges

Honda Motors’ recent earnings call presented a mixed sentiment, with notable achievements in the motorcycle segment and revised profit forecasts being overshadowed by significant declines in operating profit, tariff impacts, and losses in the automobile segment. The challenges faced in China and other regions further contributed to a negative outlook for the company.

Honda Motors Reports Decline in Quarterly Earnings

Honda Motor Co., Ltd. is a leading global manufacturer in the automotive and motorcycle industries, known for its innovative engineering and diverse product lineup, including automobiles, motorcycles, and power equipment.