Harel (HARL) AI Stock Analysis

• Market Cap: $20.27B
• Dividend Yield: 2.96%
• Average Volume (3M): 473.75K
• Price to Earnings (P/E): 10.5
• Beta (1Y): 1.62
• Revenue Growth: 16.52%
• EPS Growth: 108.70%
• Country: IL
• Employees: 5,158
• Sector: Financial
• Sector Strength: 70
• Industry: Insurance - Diversified
• EPS (TTM): 406.00
• Shares Outstanding: 205,838,000
• 10 Day Avg. Volume: 538,559
• 30 Day Avg. Volume: 473,748
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• Enterprise Value/Market Cap: 1.92
• Enterprise Value/Revenue: 1.63
• Enterprise Value/Gross Profit: 1.63
• Enterprise Value/Ebitda: 14.50
• 1Y Price Target: $12,150.94
• Price Target Upside: 14.09% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 2

• Rating: 71 Outperform
• Price Target: 11,680.00 ▲(9.67% Upside)

Harel's strong financial performance, particularly in revenue growth and profitability, is a key strength. However, high leverage and declining cash flow growth are significant risks. The stock's valuation is attractive, with a low P/E ratio and a solid dividend yield. Technical indicators suggest stability, but no clear momentum direction.

Harel Business Overview & Revenue Model

Company Description

Harel Insurance Investments & Financial Services Ltd offers insurance and financial services in Israel, the United States, and Western Europe. The company operates through five segments: Life Assurance and Long-Term Savings, Health Insurance, Non-life insurance, Insurance Companies Overseas, and Capital Market and Financial Services. It offers various classes of life insurance products, which provide coverage for risks, such as death, disability, work disability, and critical illness; and long-term saving products, as well as manages pension and provident funds. The company also provides health insurance that provides coverage for illness and hospitalization, and personal accident; travel insurance, insurance for foreign workers, and insurance for tourists; and dental insurance for conservative, periodontal, orthodontic, and oral rehabilitation treatments. In addition, it offers motor property insurance; professional liability insurance for investment consultants, portfolio managers, attorneys, engineers, architects, and accountants; insurance for clinical trials; directors and officers liability insurance; liability insurance for defective products; cyber insurance; third-party liability insurance; employers' liability insurance; and credit insurance for mortgages. Further, it provides fire and theft, homeowners, terrorism, cash in transit, goods in transit, electronic equipment, agricultural, mechanical engineering equipment, mechanical failure, and homebuyers insurance products as well as insurance for building work and various projects by contractors. Additionally, it manages mutual funds and investment portfolios; and offers certificates of deposit and private equity funds. The company was founded in 1933 and is based in Ramat Gan, Israel.

How the Company Makes Money

Harel makes money through a diversified revenue model primarily centered around insurance premiums, investment income, and management fees. The company's key revenue streams include collecting premiums from policyholders for life and general insurance products and earning returns on the investments made using these premiums. Additionally, Harel generates income from managing pension and provident funds by charging management fees and performance fees. The company may also engage in strategic partnerships and collaborations to enhance its service offerings and expand its market reach, contributing to its earnings.

Harel Financial Statement Overview

Summary

Harel presents a mixed financial picture. While the company exhibits strong gross profit margins and a solid balance sheet, challenges in profitability and cash flow management pose risks. Revenue volatility and declining cash flow warrant attention, but the manageable debt levels provide some stability. Strategic improvements in operational efficiency and cash flow generation could enhance overall financial performance.

Income Statement

The income statement shows a mixed performance. The gross profit margin is exceptionally high due to low cost of goods sold, suggesting strong pricing power or revenue recognition strategies. However, the net profit margin is relatively low, indicating high operating costs. The revenue growth rate is volatile, with recent declines in revenue. The EBIT and EBITDA margins reveal operational challenges, as they are lower than industry averages. Overall, while there are some positive elements, the company faces profitability challenges.

Balance Sheet

The balance sheet is relatively strong with a high equity ratio, indicating a solid capital structure. The debt-to-equity ratio is moderate, showing manageable leverage. Return on equity is positive but could be improved to enhance shareholder value. Overall, the balance sheet reflects a stable financial position, but there is room for improving returns.

Cash Flow

The cash flow statement reveals significant challenges. Operating cash flow is negative, indicating potential liquidity issues. Free cash flow has declined sharply, suggesting difficulties in generating cash after capital expenditures. The free cash flow to net income ratio is unfavorable, highlighting inefficiencies in cash generation. Improvements in cash management are necessary to bolster financial health.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	23.86B	27.16B	24.86B	12.69B	27.48B	18.72B
Gross Profit	23.89B	26.64B	24.86B	12.69B	27.48B	18.72B
EBITDA	2.69B	2.45B	1.53B	2.05B	2.31B	1.18B
Net Income	1.23B	946.00M	485.00M	906.00M	1.21B	724.00M
Balance Sheet
Total Assets	154.92B	158.66B	144.81B	135.27B	137.67B	119.75B
Cash, Cash Equivalents and Short-Term Investments	25.99B	25.53B	26.50B	24.89B	26.25B	21.78B
Total Debt	17.68B	18.50B	10.95B	7.28B	7.14B	6.03B
Total Liabilities	144.53B	149.46B	135.85B	126.88B	128.78B	111.99B
Stockholders Equity	10.37B	9.12B	8.89B	8.34B	8.86B	7.74B
Cash Flow
Free Cash Flow	-2.08B	-3.52B	3.02B	1.60B	1.13B	1.07B
Operating Cash Flow	-1.61B	-3.06B	3.47B	1.98B	1.49B	1.41B
Investing Cash Flow	-1.04B	-1.02B	-511.00M	-371.00M	-632.00M	-203.00M
Financing Cash Flow	1.26B	1.45B	1.01B	-1.01B	581.00M	35.00M

Harel Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 10650.00
• 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:HARL, the sentiment is Positive. The current price of 10650 is above the 20-day moving average (MA) of 10548.50, above the 50-day MA of 10391.71, and above the 200-day MA of 7302.30, indicating a bullish trend. The MACD of -122.47 indicates Positive momentum. The RSI at 54.02 is Neutral, neither overbought nor oversold. The STOCH value of 34.39 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for IL:HARL.

Harel Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
PHOE	77 Outperform	27.31B	10.02	15.26%	4.43%	18.37%	92.33%
MMHD	75 Outperform	17.88B	10.69	14.97%	4.00%	28.29%	74.13%
CLIS	73 Outperform	12.20B	8.58	14.86%	2.48%	―	―
HARL	71 Outperform	$20.27B	10.53	19.01%	2.96%	16.52%	108.70%
MGDL	69 Neutral	10.94B	12.45	9.76%	0.50%	24.69%	-28.38%
IDIN	63 Neutral	2.86B	8.90	26.00%	7.83%	24.23%	48.82%
Sector *	68 Neutral	$18.00B	11.42	9.92%	3.81%	9.73%	1.22%

Harel Corporate Events

Harel Insurance Company Shows Resilience Amid Solvency Ratio Decline

Harel Insurance Company is experiencing a decrease in solvency ratio, projected to reach 167% by the end of 2024 due to financial market changes and regulatory adjustments. Despite this, the company maintains strong capital adequacy and stable profitability from insurance activities, underscoring its resilience and commitment to market position amidst global financial challenges.