Harel (HARL) AI Stock Analysis

• Market Cap: $23.84B
• Dividend Yield: 2.59%
• Average Volume (3M): 491.74K
• Price to Earnings (P/E): 12.4
• Beta (1Y): 1.71
• Revenue Growth: 5.84%
• EPS Growth: 138.80%
• Country: IL
• Employees: 5,158
• Sector: Financial
• Sector Strength: 70
• Industry: Insurance - Diversified
• EPS (TTM): 406.00
• Shares Outstanding: 206,211,070
• 10 Day Avg. Volume: 470,172
• 30 Day Avg. Volume: 491,739
• PEG Ratio: 0.11
• Price to Book (P/B): 1.14
• Price to Sales (P/S): 0.38
• P/FCF Ratio: -2.96
• Enterprise Value/Market Cap: 1.64
• Enterprise Value/Revenue: 1.39
• Enterprise Value/Gross Profit: 1.44
• Enterprise Value/Ebitda: 9.58
• 1Y Price Target: $12,819.00
• Price Target Upside: 6.03% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 2
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 75 Outperform
• Price Target: 13,635.00 ▲(12.78% Upside)

Harel's stock is supported by strong technical indicators and a reasonable valuation, contributing to a positive outlook. However, financial performance is mixed due to high leverage and declining cash flow, which are significant risks that need addressing.

Positive Factors

Revenue Growth

The robust revenue growth indicates Harel's successful business expansion and strong market presence, supporting long-term sustainability.

Profitability Improvements

Improved profitability margins reflect efficient cost management and operational performance, enhancing Harel's financial health over time.

Efficient Cash Generation

Efficient cash generation relative to net income indicates Harel's ability to convert profits into cash, supporting future investments and stability.

Negative Factors

High Leverage

Significant leverage poses financial risks, potentially limiting Harel's flexibility and increasing vulnerability to economic downturns.

Declining Cash Flow

The decline in cash flow growth indicates potential liquidity issues, which could impact Harel's ability to fund operations and growth initiatives.

Market Fluctuations

Volatility in revenue growth rates may reflect market instability, posing challenges for consistent long-term growth and planning.

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 generates revenue through multiple streams, primarily from premiums collected on insurance policies, investment income from its asset management operations, and fees from managing pension funds and mutual funds. The company earns significant income from life insurance products, which include both term and whole life policies. In addition, Harel's asset management division contributes to its revenues through management fees and performance fees from investment portfolios. Strategic partnerships with other financial institutions and a robust distribution network also enhance Harel's market reach, allowing it to attract more customers and increase its earnings. Overall, the combination of insurance underwriting, investment returns, and asset management services forms the core of Harel's revenue model.

Harel Financial Statement Overview

Summary

Harel demonstrates strong revenue growth and profitability improvements, with efficient cost management and operational performance. However, the high leverage and declining cash flow growth pose potential risks. The company needs to address its debt levels and improve cash flow generation to sustain its financial health.

Income Statement

Harel's income statement shows strong revenue growth with a 17.99% increase in TTM, indicating robust business expansion. The gross profit margin is exceptionally high at 100.12%, suggesting efficient cost management. The net profit margin improved to 5.16% in TTM, reflecting enhanced profitability. EBIT and EBITDA margins also increased, demonstrating operational efficiency. However, the historical volatility in revenue growth rates suggests potential market fluctuations.

Balance Sheet

The balance sheet reveals a high debt-to-equity ratio of 1.71 in TTM, indicating significant leverage, which could pose financial risks. However, the return on equity improved to 13.30%, showcasing effective use of equity to generate profits. The equity ratio is stable, reflecting a balanced asset structure. The increasing debt levels over the years warrant caution.

Cash Flow

Cash flow analysis shows a concerning decline in free cash flow growth by -173.48% in TTM, indicating potential liquidity issues. The operating cash flow to net income ratio is zero, suggesting challenges in converting income into cash. However, the free cash flow to net income ratio is strong at 1.29, indicating efficient cash generation relative to net income. The negative trend in cash flow growth is a significant risk factor.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	28.04B	27.16B	24.86B	12.69B	27.49B	18.72B
Gross Profit	27.11B	24.73B	24.86B	10.70B	25.68B	16.91B
EBITDA	4.07B	2.45B	1.53B	2.06B	2.31B	1.50B
Net Income	1.93B	946.00M	485.00M	906.00M	1.21B	724.00M
Balance Sheet
Total Assets	162.05B	158.66B	144.81B	135.27B	137.67B	119.75B
Cash, Cash Equivalents and Short-Term Investments	12.15B	25.53B	26.50B	24.89B	26.25B	21.78B
Total Debt	19.77B	18.50B	10.95B	7.28B	7.14B	6.03B
Total Liabilities	150.91B	149.46B	135.85B	126.88B	128.78B	111.99B
Stockholders Equity	11.11B	9.12B	8.89B	8.34B	8.86B	7.74B
Cash Flow
Free Cash Flow	1.53B	-3.52B	3.02B	1.60B	1.13B	1.07B
Operating Cash Flow	1.99B	-3.06B	3.47B	1.98B	1.49B	1.41B
Investing Cash Flow	-1.03B	-1.02B	-511.00M	-371.00M	-632.00M	-203.00M
Financing Cash Flow	2.29B	1.45B	1.01B	-1.01B	581.00M	35.00M

Harel Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 12090.00
• 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 Neutral. The current price of 12090 is below the 20-day moving average (MA) of 12307.50, above the 50-day MA of 11378.12, and above the 200-day MA of 8559.64, indicating a neutral trend. The MACD of 266.34 indicates Positive momentum. The RSI at 51.41 is Neutral, neither overbought nor oversold. The STOCH value of 29.39 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for IL:HARL.

Harel Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
PHOE	81 Outperform	32.94B	12.09	―	3.53%	12.22%	71.31%
MMHD	79 Outperform	20.56B	12.30	―	3.16%	28.29%	74.13%
CLIS	75 Outperform	14.81B	10.42	―	2.00%	―	―
HARL	75 Outperform	$23.84B	12.36	23.23%	2.59%	5.84%	138.80%
MGDL	74 Outperform	12.79B	14.56	―	0.40%	6.00%	36.33%
IDIN	69 Neutral	3.52B	10.23	―	6.13%	19.48%	53.61%
Sector *	68 Neutral	$18.00B	11.42	9.92%	3.81%	9.73%	1.22%