Knorr-Bremse (KNRRY) AI Stock Analysis

• Market Cap: $18.05B
• Dividend Yield: 1.78%
• Average Volume (3M): 221.00
• Price to Earnings (P/E): 36.9
• Beta (1Y): 0.61
• Revenue Growth: 0.15%
• EPS Growth: -26.41%
• Country: US
• Employees: 29,051
• Sector: Consumer Cyclical
• Sector Strength: 84
• Industry: Auto - Parts
• EPS (TTM): 0.26
• Shares Outstanding: 644,800,000
• 10 Day Avg. Volume: 0
• 30 Day Avg. Volume: 221
• PEG Ratio: -1.29
• Price to Book (P/B): 3.69
• Price to Sales (P/S): 1.43
• P/FCF Ratio: 16.15
• Enterprise Value/Market Cap: 0.95
• Enterprise Value/Revenue: 2.11
• Enterprise Value/Gross Profit: 4.58
• Enterprise Value/Ebitda: 10.55
• 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: 73 Outperform
• Price Target: $30.00 ▲(8.70% Upside)

Knorr-Bremse's overall stock score reflects strong technical indicators and positive earnings call insights, which are slightly offset by valuation concerns and financial performance risks. The company's strategic initiatives and market positioning support future growth, but attention to leverage and cash flow is necessary.

Positive Factors

Strategic Acquisitions

The acquisition of Duagon is expected to enhance Knorr-Bremse's RVS segment and unlock synergies in electronics, supporting growth in Railway Electronics and Signaling technology units.

Operational Efficiency

The operating EBIT margin improved by 100 basis points year-over-year, marking the best profitability in the last 16 quarters, indicating strong operational efficiency.

Free Cash Flow Generation

Free cash flow in Q3 was robust at EUR 159 million with a cash conversion rate of 104%, demonstrating effective cash generation and financial health.

Negative Factors

Declining Gross Profit Margins

The decline in gross profit margins suggests pressure on cost management, which could impact long-term profitability if not addressed.

Increased Leverage

Increased leverage can strain financial flexibility and elevate risk, potentially affecting the company's ability to invest in growth opportunities.

Challenges in North American Truck Market

Significant challenges in the North American truck market could hinder growth in the CVS segment, affecting overall revenue and profitability.

Knorr-Bremse Business Overview & Revenue Model

Company Description

Knorr-Bremse AG is a leading global provider of braking systems and other safety-critical components for rail and commercial vehicles. Founded in 1905 and headquartered in Munich, Germany, the company operates in two main business segments: Rail Vehicle Systems and Commercial Vehicle Systems. Knorr-Bremse's core products include braking systems, door systems, and other components that enhance the safety and efficiency of transportation systems worldwide.

How the Company Makes Money

Knorr-Bremse generates revenue primarily through the sale of its braking systems and related components to manufacturers of rail vehicles and commercial vehicles. The company earns income from both original equipment manufacturing (OEM) sales and aftermarket services, including maintenance and repair parts for existing systems. Key revenue streams include contracts with major automotive and rail manufacturers, as well as partnerships with public transportation networks that rely on Knorr-Bremse's technology for safety and efficiency. Additionally, the demand for innovative and eco-friendly transportation solutions, along with regulatory requirements for safety, supports the company's earnings growth.

Knorr-Bremse Financial Statement Overview

Summary

Knorr-Bremse demonstrates solid financial performance with consistent revenue growth and strong operational margins. However, declining gross profit margins and increased leverage pose risks. The cash flow situation requires attention, particularly in improving free cash flow generation.

Income Statement

Knorr-Bremse's income statement shows a stable revenue growth rate of 3.69% in the TTM period, indicating a positive trajectory. The gross profit margin has decreased from 53.75% in 2024 to 46.45% in the TTM, which suggests some pressure on cost management. However, the EBIT and EBITDA margins remain strong at 9.83% and 14.81%, respectively, reflecting operational efficiency. The net profit margin is slightly lower at 5.37%, indicating room for improvement in net profitability.

Balance Sheet

The balance sheet reveals a moderate debt-to-equity ratio of 1.08 in the TTM, which is slightly higher than previous years, indicating increased leverage. The return on equity (ROE) is healthy at 14.04%, though it has decreased from 19.48% in 2023, suggesting a slight decline in profitability relative to equity. The equity ratio stands at 34.49%, showing a balanced capital structure but with potential risks if leverage continues to rise.

Cash Flow

Cash flow analysis indicates a decline in free cash flow growth by 3.40% in the TTM, which could be a concern for liquidity. The operating cash flow to net income ratio is 0.43, suggesting that operating cash generation is lower relative to net income. The free cash flow to net income ratio is 0.77, indicating that a significant portion of net income is converted into free cash flow, though this has room for improvement.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	8.14B	7.88B	7.93B	7.15B	6.71B	6.16B
Gross Profit	3.75B	4.24B	4.02B	3.52B	3.45B	3.26B
EBITDA	1.63B	1.53B	1.21B	1.05B	1.21B	1.06B
Net Income	459.10M	445.00M	552.53M	489.28M	621.31M	495.50M
Balance Sheet
Total Assets	10.32B	9.61B	8.25B	8.01B	7.20B	7.39B
Cash, Cash Equivalents and Short-Term Investments	1.64B	2.35B	1.29B	1.45B	1.44B	2.32B
Total Debt	3.68B	3.17B	2.76B	2.68B	2.15B	2.98B
Total Liabilities	6.66B	6.49B	5.35B	5.32B	4.77B	5.47B
Stockholders Equity	3.56B	3.04B	2.84B	2.56B	2.33B	1.83B
Cash Flow
Free Cash Flow	792.51M	696.00M	540.00M	189.41M	579.96M	674.34M
Operating Cash Flow	1.10B	1.04B	914.59M	541.55M	975.49M	1.04B
Investing Cash Flow	-284.03M	-750.00M	-410.64M	-505.00M	-534.37M	-576.39M
Financing Cash Flow	-1.16B	630.00M	-397.67M	-160.81M	-1.42B	-10.37M

Knorr-Bremse Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 27.60
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For KNRRY, the sentiment is Positive. The current price of 27.6 is above the 20-day moving average (MA) of 26.73, above the 50-day MA of 24.86, and above the 200-day MA of 24.52, indicating a bullish trend. The MACD of 0.85 indicates Negative momentum. The RSI at 67.14 is Neutral, neither overbought nor oversold. The STOCH value of 94.38 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for KNRRY.

Knorr-Bremse Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
ALV	78 Outperform	$9.15B	12.41	31.09%	2.60%	0.84%	26.17%
LEA	75 Outperform	$6.12B	14.33	8.96%	2.63%	-1.90%	-13.86%
KNRRY	73 Outperform	$18.05B	36.88	14.16%	1.78%	0.15%	-26.41%
VC	73 Outperform	$2.68B	8.70	23.16%	0.57%	-4.03%	-39.51%
APTV	70 Outperform	$16.68B	60.63	3.25%	―	2.16%	-85.91%
BWA	65 Neutral	$9.72B	72.38	2.24%	1.24%	0.08%	-83.69%
Sector *	61 Neutral	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%