Hon Hai Precision Industry (HNHPF) AI Stock Analysis

• Market Cap: $103.75B
• Dividend Yield: 2.71%
• Average Volume (3M): 3.52K
• Price to Earnings (P/E): 17.0
• Beta (1Y): 0.85
• Revenue Growth: 18.11%
• EPS Growth: 21.94%
• Country: US
• Employees: 826,608
• Sector: Technology
• Sector Strength: 88
• Industry: Hardware, Equipment & Parts
• EPS (TTM): 0.27
• Shares Outstanding: 6,982,111,300
• 10 Day Avg. Volume: 3,800
• 30 Day Avg. Volume: 3,519
• PEG Ratio: 2.25
• Price to Book (P/B): 1.54
• Price to Sales (P/S): 0.37
• P/FCF Ratio: 115.23
• Enterprise Value/Market Cap: 32.63
• Enterprise Value/Revenue: 0.44
• Enterprise Value/Gross Profit: 7.11
• Enterprise Value/Ebitda: 8.53
• 1Y Price Target: $21.00
• Price Target Upside: 41.51% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 1
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 64 Neutral
• Price Target: $15.50 ▲(4.45% Upside)

The score is driven primarily by stable profitability and a reasonable leverage profile, offset by weak cash flow quality (negative free cash flow and low operating cash conversion). Technical indicators are neutral-to-soft, while valuation is moderate with a supportive dividend yield.

Positive Factors

Scale and client relationships

Foxconn's core OEM/ODM scale and longstanding contracts with top global brands create durable revenue backbone. Large, multi-year manufacturing relationships and deep supply-chain know-how support stable order flow, cost efficiencies, and sustained competitive advantage across cycles.

Stable margins and healthy ROE

Consistent gross and improving net margins alongside an 11.5% ROE indicate effective cost management and profitable capital deployment. These durable profitability metrics underpin reinvestment capacity and shareholder returns even in lower-growth periods, supporting long-term financial resilience.

Moderate leverage and equity base

A moderate debt-to-equity ratio and solid equity ratio provide financial flexibility to fund capex and strategic moves into automation and EV components. Balanced leverage reduces short-term solvency risk and preserves the ability to raise capital if pursuing structural growth initiatives.

Negative Factors

Weak cash flow conversion

Negative free cash flow and very low operating-cash-to-income conversion suggest earnings are not translating into reliable cash. This undermines capacity to self-fund capex, dividends, or debt reduction and increases reliance on external financing, reducing long-term financial flexibility.

Modest revenue growth

Low single-digit revenue growth in a capital-intensive, competitive electronics market limits upside from scale alone. Without successful expansion into higher-growth areas like EV components or AI/automation, structural top-line stagnation could pressure future margin expansion and returns.

Customer concentration risk

High revenue concentration among a few large customers creates structural exposure: shifts in client demand, design wins, or pricing negotiations can materially affect revenue and margins. Dependence on top clients reduces pricing power and increases business volatility over time.

Hon Hai Precision Industry Business Overview & Revenue Model

Company Description

Hon Hai Precision Industry Co., Ltd. provides technology solutions in Japan, Ireland, the United States, Singapore, China, Taiwan, and internationally. The company manufactures, sells, and services connectors, cases, thermal modules, wired/wireless communication products, optical products, power supply modules, and assemblies for use in the information technology, communications, automotive equipment, precision molding, automobile, and consumer electronics industries. It also manufactures and sells computer terminal monitors and related components, as well as data storage and processing equipment; offers solutions for autonomous driving systems, new energy power, and IoV systems; and provides services of planning, advisory, and business operation and management, logistics, export processing, construction, leasing, and information/software services. In addition, the company manufactures and sells application modules and network cables assemblies; develops educational technology; holds patent applications; manufactures and trades in portable cameras; and retails office machinery and equipment, and electronic appliances. Further, it is involved in the reinvestment in the businesses relating to robots, automatic equipment, molds, parts, and accessories and corresponding services; and software development, repair and after-sale, and rental services of robots. Additionally, the company manufactures and sells computer and data processing equipment, WIFI cards and modules, CFTVs, DVRs, Bluetooth modules, set-top boxes, and optical network terminals. It is also involved in the provision of data storage services; manufacturing of wire or wireless communication; installation of computer and satellite TV channels; and provision of mobile phone services, as well as telecom-related business. The company was founded in 1974 and is headquartered in New Taipei City, Taiwan.

How the Company Makes Money

Foxconn generates revenue primarily through contract manufacturing services, where it assembles electronic products for various global technology brands. The company's revenue model is largely based on serving as an original equipment manufacturer (OEM) and original design manufacturer (ODM), allowing it to capitalize on high-volume production contracts. Key revenue streams include the assembly of smartphones, laptops, and other consumer electronics, with significant contributions from long-term partnerships with major clients like Apple, which account for a substantial portion of its sales. Additionally, Foxconn has been expanding its services into new areas such as automation and electric vehicle components, which are poised to become important revenue sources in the future. The company's scale and expertise in supply chain management further enhance its competitive edge and profitability.

Hon Hai Precision Industry Financial Statement Overview

Summary

Hon Hai Precision Industry demonstrates stable financial performance with consistent revenue growth and profitability margins. The balance sheet reflects a balanced leverage position, though rising debt levels warrant attention. Cash flow management appears to be a concern, with negative free cash flow indicating potential liquidity issues.

Income Statement

Hon Hai Precision Industry shows a stable revenue growth with a TTM increase of 2.75%. The gross profit margin is consistent around 6.2%, and the net profit margin has improved slightly to 2.45% in TTM. EBIT and EBITDA margins are also stable, indicating efficient cost management. However, the growth rate is modest, which could be a concern in a competitive industry.

Balance Sheet

The company maintains a moderate debt-to-equity ratio of 0.68, reflecting a balanced approach to leverage. Return on equity is healthy at 11.48%, indicating effective use of equity capital. The equity ratio stands at 33.43%, suggesting a solid equity base. However, the increasing debt levels could pose a risk if not managed carefully.

Cash Flow

Operating cash flow remains positive, but free cash flow is negative in TTM, indicating potential liquidity challenges. The operating cash flow to net income ratio is low at 0.07, suggesting limited cash generation relative to profits. The negative free cash flow growth and ratio to net income highlight potential cash management issues.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	7.63T	6.86T	6.16T	6.63T	5.99T	5.36T
Gross Profit	475.88B	428.95B	387.95B	400.09B	362.13B	302.92B
EBITDA	396.71B	336.55B	355.55B	292.08B	291.01B	250.90B
Net Income	190.47B	152.71B	142.10B	141.48B	139.32B	101.79B
Balance Sheet
Total Assets	4.89T	4.39T	3.94T	4.13T	3.91T	3.67T
Cash, Cash Equivalents and Short-Term Investments	1.30T	1.32T	1.35T	1.08T	1.11T	1.28T
Total Debt	1.23T	961.56B	943.07B	974.01B	871.55B	748.26B
Total Liabilities	3.07T	2.54T	2.25T	2.48T	2.34T	2.20T
Stockholders Equity	1.64T	1.65T	1.49T	1.45T	1.38T	1.30T
Cash Flow
Free Cash Flow	-22.89B	21.99B	326.60B	8.05B	-192.71B	310.09B
Operating Cash Flow	135.13B	166.03B	445.55B	109.71B	-98.21B	377.62B
Investing Cash Flow	-191.07B	-300.05B	-137.87B	-45.44B	-92.08B	34.59B
Financing Cash Flow	171.24B	-164.07B	-160.64B	-87.87B	24.28B	-25.12B

Hon Hai Precision Industry Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 14.84
• 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 HNHPF, the sentiment is Positive. The current price of 14.84 is above the 20-day moving average (MA) of 14.48, above the 50-day MA of 14.76, and above the 200-day MA of 12.55, indicating a bullish trend. The MACD of 0.03 indicates Negative momentum. The RSI at 53.35 is Neutral, neither overbought nor oversold. The STOCH value of 39.86 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for HNHPF.

Hon Hai Precision Industry Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
TEL	80 Outperform	$69.81B	38.52	14.78%	1.21%	8.94%	-39.90%
APH	74 Outperform	$179.63B	48.92	34.78%	0.54%	47.37%	72.30%
GLW	74 Outperform	$77.34B	57.21	12.07%	1.25%	18.27%	771.78%
FLEX	74 Outperform	$23.60B	29.39	17.45%	―	0.77%	0.51%
JBL	73 Outperform	$25.48B	37.54	47.87%	0.14%	13.18%	-38.37%
HNHPF	64 Neutral	$103.75B	16.96	11.70%	2.71%	18.11%	21.94%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%