Afcon Hold (AFHL) AI Stock Analysis

• Market Cap: 1.94B
• Dividend Yield: 1.12%
• Average Volume (3M): 2.41K
• Price to Earnings (P/E): 24.2
• Beta (1Y): 0.86
• Revenue Growth: -8.18%
• EPS Growth: 329.99%
• Country: IL
• Employees: 1,335
• Sector: Services
• Sector Strength: N/A
• Industry: Hardware, Equipment & Parts
• EPS (TTM): N/A
• Shares Outstanding: 5,568,821
• 10 Day Avg. Volume: 3,356
• 30 Day Avg. Volume: 2,414
• PEG Ratio: -0.02
• Price to Book (P/B): 1.77
• Price to Sales (P/S): 0.52
• P/FCF Ratio: 202.74
• 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: N/A
• Number of Analyst Covering: 0
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 65 Neutral
• Price Target: 37,485.00 ▲(12.57% Upside)

Afcon Hold's overall stock score reflects a balance between mixed financial performance and positive technical indicators. The stable profitability metrics and improving free cash flow growth are offset by high leverage and cash flow challenges. The stock's positive momentum and fair valuation contribute positively to the score.

Positive Factors

Diversified Business Model

A diversified revenue base across construction, manufacturing and tech reduces dependency on any single cycle. Long-term, this supports steadier revenue visibility from government contracts and partnerships, and allows cross-selling and scale benefits in manufacturing.

Stable Profit Margins

Maintained gross and net margins despite revenue pressures indicate effective cost control and operational efficiency. Durable margins support cash generation per project, help absorb volume volatility, and sustain return metrics even if top-line recovery is gradual.

Improving Free Cash Flow Growth

A strong FCF growth rate signals improving cash conversion trends. If sustainable, this can fund capex, reduce leverage, and support dividends or strategic investments. It marks progress on a structural cash-generation recovery even if absolute FCF remains constrained today.

Negative Factors

Sharp Revenue Contraction

A >50% TTM revenue decline materially reduces scale economies and pricing leverage, making fixed-cost absorption harder. Structurally, this weakens backlog quality, bargaining power with suppliers, and the firm's ability to invest in growth initiatives until revenues stabilize.

High Financial Leverage

Material leverage increases interest and refinancing sensitivity, limiting strategic flexibility. With an equity ratio around 28%, the balance sheet has limited buffers, raising long-term risk if cash generation stalls or project timings slip, necessitating deleveraging.

Negative Operating Cash Flow

Persistent negative operating cash flow undermines the firm's ability to self-fund operations, capex, and debt service. Even with improving FCF growth, continued negative OCF implies reliance on external financing, increasing refinancing and liquidity risk over the medium term.

Afcon Hold Business Overview & Revenue Model

Company Description

Afcon Holdings Ltd engages in the buildings and infrastructure, control and automation, trade, and communication solutions businesses in Israel and internationally. It provides solutions and technologies in the areas of multi-system infrastructure projects, including construction contracting and finishing works; installation of electromechanical systems and electrical systems for industry; manufacture and installation of HV/MV/LV switchgear products for buildings, industry, and infrastructure; natural gas engineering; and the construction and setup of wind farms, photovoltaic fields, and infrastructure facilities. The company also offers control and automation solutions, such as industrial control, building monitoring and management, security solutions, fire protection and safety, parking systems, and remote water metering solutions. In addition, it engages in the design, development, manufacture, marketing, installation, distribution, servicing, and maintenance of unified communications and collaboration systems, including digital IP-based switchboards, communication servers for enterprises, contact/call centers, interfaces for exchanges and smartphones, and business data networks. Further, the company distributes switching and electrical hardware, equipment control and instrumentation, and electronic equipment and packaging solutions. Additionally, it provides cyber and network security, network management, cloud services, and maintenance contracts; and customer engagement solutions. The company serves energy, ports and airports, transportation systems, fuel, gas and water, telecommunications, industry, and defense sectors; and public institutions and organizations, and municipal and government bodies. The company was formerly known as Afcon Industries Group. The company was founded in 1945 and is based in Petah Tikva, Israel. Afcon Holdings Ltd operates as a subsidiary of Shlomo Group.

How the Company Makes Money

Afcon Hold generates revenue through multiple streams, primarily from its construction and engineering projects, which account for a significant portion of its income. The company undertakes contract work for public and private sector clients, providing services ranging from infrastructure development to electrical installations. Additionally, AFHL earns revenue from the sale of manufactured goods, including electrical equipment and components. Strategic partnerships with key industry players and government contracts also enhance its revenue potential. The company benefits from economies of scale in its manufacturing operations, allowing it to maintain competitive pricing while maximizing profit margins. Moreover, AFHL's investment in technology and innovation positions it to capitalize on emerging market trends, further diversifying its revenue sources.

Afcon Hold Financial Statement Overview

Summary

Afcon Hold's financial performance is challenged by declining revenue growth and high leverage. Moderate profitability margins are overshadowed by significant cash flow issues and high debt levels, posing risks to financial stability.

Income Statement

Afcon Hold's income statement shows mixed performance. The TTM gross profit margin of 13.51% and net profit margin of 3.89% indicate moderate profitability. However, the revenue growth rate is negative at -3.21%, suggesting declining sales. EBIT and EBITDA margins are relatively stable, but the overall trend points to challenges in maintaining revenue growth.

Balance Sheet

The balance sheet reveals a high debt-to-equity ratio of 1.32, indicating significant leverage. Return on equity is 12.61%, showing decent profitability relative to equity. However, the equity ratio is not provided, limiting a full assessment of asset financing. The high leverage poses potential risks if earnings do not improve.

Cash Flow

Cash flow analysis highlights concerns with negative operating cash flow and free cash flow in the TTM period. The free cash flow growth rate is significantly negative at -67.21%, and the operating cash flow to net income ratio is negative, indicating cash flow challenges. The high free cash flow to net income ratio suggests reliance on non-operating cash sources.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	1.70B	1.78B	2.15B	2.09B	2.11B	1.73B
Gross Profit	239.95M	222.07M	159.05M	140.86M	228.28M	153.34M
EBITDA	170.03M	146.48M	95.77M	46.35M	240.66M	108.76M
Net Income	75.45M	59.80M	-8.56M	-53.82M	119.41M	13.51M
Balance Sheet
Total Assets	2.01B	1.95B	1.86B	1.86B	1.95B	1.87B
Cash, Cash Equivalents and Short-Term Investments	155.88M	191.98M	197.94M	255.93M	508.28M	480.81M
Total Debt	748.85M	662.51M	677.13M	653.63M	591.72M	681.52M
Total Liabilities	1.41B	1.40B	1.39B	1.38B	1.40B	1.38B
Stockholders Equity	568.15M	529.42M	450.87M	455.72M	535.26M	492.18M
Cash Flow
Free Cash Flow	-40.78M	4.62M	52.92M	-146.73M	135.27M	52.71M
Operating Cash Flow	-22.07M	22.70M	72.27M	-130.03M	159.59M	76.19M
Investing Cash Flow	-38.41M	-22.30M	-38.87M	-77.89M	90.27M	-93.35M
Financing Cash Flow	104.49M	-8.84M	-71.37M	-43.79M	-187.41M	144.25M

Afcon Hold Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 33300.00
• 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 IL:AFHL, the sentiment is Neutral. The current price of 33300 is below the 20-day moving average (MA) of 33852.50, above the 50-day MA of 30927.20, and above the 200-day MA of 22489.54, indicating a neutral trend. The MACD of 1018.41 indicates Positive momentum. The RSI at 53.78 is Neutral, neither overbought nor oversold. The STOCH value of 48.24 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for IL:AFHL.

Afcon Hold Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
KAFR	69 Neutral	683.28M	10.10	―	3.17%	-0.71%	2.35%
AFHL	65 Neutral	1.94B	24.23	―	1.12%	-8.18%	329.99%
PRTC	61 Neutral	2.78B	22.08	―	―	―	20.99%
Sector *	55 Neutral	$13.29B	17.42	10.03%	0.93%	7.13%	-12.93%