Afcon Hold (AFHL) AI Stock Analysis

• Market Cap: ₪1.84B
• Dividend Yield: 1.12%
• Average Volume (3M): 2.41K
• Price to Earnings (P/E): 22.9
• Beta (1Y): 0.83
• 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: 37,023.00 ▲(11.18% 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

Business Diversification

A diversified business mix across construction, manufacturing and technology reduces revenue cyclicality and concentration risk. Over 2-6 months this supports steadier cash flows, cross-selling, and resource allocation flexibility, helping the firm withstand sector-specific downturns and capture multi-industry demand.

Sustainable Profit Margins

Maintained gross and net margins indicate effective cost controls and underlying operational efficiency. Even with revenue headwinds, stable margins support long-term profitability, enabling the company to allocate cash to operations, maintain supplier relationships and preserve competitiveness in bidding for contracts.

Improving Free Cash Flow Growth

A strong improvement in free cash flow growth signals recovering cash generation capacity. If sustained, it can provide durable funding for capex, debt reduction or strategic investments, improving financial flexibility and reducing reliance on external financing over the medium term.

Negative Factors

High Financial Leverage

Material leverage increases interest and refinancing exposure and limits strategic flexibility. With a debt/equity of 1.32, the company faces higher fixed obligations that can strain cash flow under adverse conditions, elevating default and refinancing risks over the coming months.

Sharp Revenue Contraction

A sustained, large revenue decline undermines scale economics, pressures utilization and bid competitiveness, and can make current margins harder to sustain. Recovery will likely require new contract wins or market share gains, making near-term revenue stability uncertain and strategic execution critical.

Negative Operating Cash Flow

Negative operating cash flow signals the business is not converting profits into cash, increasing reliance on debt or equity to fund operations. Coupled with high leverage, this constrains investment capacity, heightens liquidity risk and could necessitate deleveraging or asset sales to restore balance.

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 mixed. The income statement shows stable profitability metrics despite a significant revenue decline. The balance sheet indicates high leverage, and cash flow management is challenging with negative operating and free cash flows, though there is improvement in free cash flow growth.

Income Statement

Afcon Hold's income statement shows a mixed performance. The TTM data reveals a decline in revenue growth at -55.1%, indicating a significant contraction. However, the company maintains a stable gross profit margin of 13.5% and a net profit margin of 3.9%, which are reasonable for the industry. The EBIT and EBITDA margins are also positive, suggesting operational efficiency. Despite the revenue decline, profitability metrics remain stable, reflecting effective cost management.

Balance Sheet

The balance sheet reflects a moderate financial position. The debt-to-equity ratio is relatively high at 1.32, indicating significant leverage, which could pose a risk if not managed properly. However, the return on equity (ROE) is healthy at 12.6%, suggesting that the company is generating good returns on its equity. The equity ratio stands at 28.3%, showing a balanced capital structure but with room for improvement in reducing debt levels.

Cash Flow

Cash flow analysis indicates challenges, with negative operating and free cash flows in the TTM period. The free cash flow growth rate is positive at 80.2%, showing improvement from previous periods, but the operating cash flow to net income ratio is negative, highlighting cash flow management issues. The free cash flow to net income ratio is high at 3.79, suggesting that while net income is positive, cash generation needs attention.

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: Positive
• 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 Positive. The current price of 33300 is above the 20-day moving average (MA) of 33291.50, above the 50-day MA of 32257.80, and above the 200-day MA of 23616.93, indicating a neutral trend. The MACD of 40.54 indicates Positive momentum. The RSI at 51.60 is Neutral, neither overbought nor oversold. The STOCH value of 49.44 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive 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	₪648.95M	9.58	―	3.17%	-0.71%	2.35%
AFHL	65 Neutral	₪1.84B	22.91	―	1.12%	-8.18%	329.99%
PRTC	61 Neutral	₪2.92B	22.41	―	―	―	20.99%
Sector *	55 Neutral	$13.29B	17.42	10.03%	0.93%	7.13%	-12.93%