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Knorr-Bremse (KNRRY)
OTHER OTC:KNRRY
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Knorr-Bremse
(OTC:KNRRY)
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Rating:73Outperform
Price Target:
$30.00
▲(1.83% 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 (KNRRY) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$19.08B
Dividend Yield1.78%
Average Volume (3M)221.00
Price to Earnings (P/E)39.1
Beta (1Y)0.61
Revenue Growth0.15%
EPS Growth-26.41%
CountryUS
Employees29,051
SectorConsumer Cyclical
Sector Strength84
IndustryAuto - Parts
Share Statistics
EPS (TTM)0.26
Shares Outstanding644,800,000
10 Day Avg. Volume0
30 Day Avg. Volume221
Financial Highlights & Ratios
PEG Ratio-1.29
Price to Book (P/B)3.69
Price to Sales (P/S)1.43
P/FCF Ratio16.15
Enterprise Value/Market Cap0.95
Enterprise Value/Revenue2.32
Enterprise Value/Gross Profit4.94
Enterprise Value/Ebitda11.55
Forecast
1Y Price TargetN/A
Price Target UpsideN/A
Rating ConsensusN/A
Number of Analyst Covering0
EPS Forecast (FY)N/A
Revenue Forecast (FY)N/A
Knorr-Bremse Business Overview & Revenue Model
Company DescriptionKnorr-Bremse Aktiengesellschaft develops, produces, markets, and services braking and other systems for rail and commercial vehicles worldwide. The company operates in two segments, Rail Vehicle Systems and Commercial Vehicle Systems. It offers braking, entrance and HVAC systems; power electrics and control technology; digital solutions for optimization of rail traffic, couplers; signal systems; stationary and mobile testing equipment; wiper and wash systems; and sanitary systems for mass transit and long distance rail vehicles. The company also provides braking systems comprising brake control systems, disk brakes, drum brakes, brake cylinders, valves and pedal units; steering systems and vehicle dynamics solutions; driver assistance systems; automated driving and electronic leveling control; energy supply and distribution systems, including compressors and air treatment products; and engine components and transmission control systems for trucks, buses, trailers, and agricultural machinery. In addition, it offers leasing, holding, logistics, and media and IT services. The company was founded in 1905 and is headquartered in Munich, Germany. Knorr-Bremse Aktiengesellschaft is a subsidiary of KB Holding GmbH.
How the Company Makes MoneyKnorr-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 Earnings Call Summary
Earnings Call Date:Oct 30, 2025
(Q3-2025)
| % Change Since: |
Next Earnings Date:Feb 19, 2026
Earnings Call Sentiment Neutral
The earnings call highlighted strong performance in the RVS segment and successful strategic acquisitions, which are expected to bolster future growth. However, significant challenges persist in the North American truck market, leading to a cautious outlook. The overall financial performance remains robust, but external market conditions pose risks.Q3-2025 Updates
Positive Updates
Strong Organic Growth and Profitability in RVS
RVS posted strong organic growth and increased profitability quarter-over-quarter through the BOOST program. The division's acquisition of duagon is expected to expand its offerings and enhance synergies.
Slight Margin Expansion in CVS
Despite challenges in the North American truck market, the CVS segment achieved a slight margin expansion through cost and efficiency measures and a resilient aftermarket business.
Improved EBIT Margin
Operating EBIT margin improved by 100 basis points year-over-year, with a reported margin of 13.3%, marking the best profitability within the last 16 quarters.
Successful Duagon Acquisition
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.
Strong Free Cash Flow
Free cash flow in Q3 amounted to EUR 159 million, converting into more than 100%, with a 104% cash conversion rate.
Negative Updates
Challenges in North American Truck Market
The North American truck market faced significant challenges, with truck production rates declining significantly in Q3 and a near-term recovery appearing unlikely.
Lowered Expectations for North American Truck Production
Due to a weaker than expected North American market, Knorr-Bremse lowered its truck production rate expectations for the second half of the year.
FX Headwinds
The company faced unfavorable FX developments, which impacted free cash flow and revenue figures negatively.
Softening European Truck Market
The European truck market showed signs of softening, with some postponements into the next year.
Company Guidance
During the Knorr-Bremse conference call for the third quarter of 2025, the company reported strong financial results, emphasizing its strategic initiatives and market positioning. The company achieved an order intake of nearly EUR 2 billion, with revenues of EUR 1.9 billion, reflecting a 3% organic growth. The operating EBIT margin improved by 100 basis points year-over-year, reaching 13.3%, marking the best profitability in the last 16 quarters. Free cash flow was robust at EUR 159 million, with a cash conversion rate of 104%. The RVS division posted strong organic growth, with an order intake of EUR 1.2 billion and an EBIT margin of 17.0%. The CVS division managed a slight margin expansion to 10.5% despite challenges in the North American truck market. The company confirmed its operating guidance for 2025, anticipating the lower end of its revenue guidance due to currency fluctuations and market conditions, while remaining confident in reaching its EBIT margin midpoint. Knorr-Bremse's ongoing BOOST program and strategic acquisitions, like those of Duagon and Travis Road Services, are expected to drive future growth, particularly in digital and service-oriented markets.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.75
Positive
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.70
Positive
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.65
Positive
| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 7.82B | 7.88B | 7.93B | 7.15B | 6.71B | 6.16B |
| Gross Profit | 3.68B | 4.24B | 4.02B | 3.52B | 3.45B | 3.26B |
| EBITDA | 1.57B | 1.53B | 1.21B | 1.05B | 1.21B | 1.06B |
| Net Income | 434.66M | 445.00M | 552.53M | 489.28M | 621.31M | 495.50M |
Balance Sheet | ||||||
| Total Assets | 8.81B | 9.61B | 8.25B | 8.01B | 7.20B | 7.39B |
| Cash, Cash Equivalents and Short-Term Investments | 1.40B | 2.35B | 1.29B | 1.45B | 1.44B | 2.32B |
| Total Debt | 3.14B | 3.17B | 2.76B | 2.68B | 2.15B | 2.98B |
| Total Liabilities | 5.68B | 6.49B | 5.35B | 5.32B | 4.77B | 5.47B |
| Stockholders Equity | 3.04B | 3.04B | 2.84B | 2.56B | 2.33B | 1.83B |
Cash Flow | ||||||
| Free Cash Flow | 770.53M | 696.00M | 540.00M | 189.41M | 579.96M | 674.34M |
| Operating Cash Flow | 1.07B | 1.04B | 914.59M | 541.55M | 975.49M | 1.04B |
| Investing Cash Flow | -269.95M | -750.00M | -410.64M | -505.00M | -534.37M | -576.39M |
| Financing Cash Flow | -1.15B | 630.00M | -397.67M | -160.81M | -1.42B | -10.37M |
Knorr-Bremse Technical Analysis
Positive
29.46
Price Trends
27.71
Positive
25.70
Positive
25.33
Positive
Market Momentum
0.53
Positive
67.85
Neutral
89.87
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 29.46 is above the 20-day moving average (MA) of 29.10, above the 50-day MA of 27.71, and above the 200-day MA of 25.33, indicating a bullish trend. The MACD of 0.53 indicates Positive momentum. The RSI at 67.85 is Neutral, neither overbought nor oversold. The STOCH value of 89.87 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
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
75 Outperform | $6.12B | 14.45 | 8.96% | 2.63% | -1.90% | -13.86% | |
73 Outperform | $19.08B | 39.14 | 14.16% | 1.78% | 0.15% | -26.41% | |
73 Outperform | $2.61B | 8.60 | 23.16% | 0.57% | -4.03% | -39.51% | |
71 Outperform | $9.15B | 12.61 | 30.32% | 2.60% | 0.84% | 26.17% | |
65 Neutral | $10.30B | 77.15 | 2.24% | 1.24% | 0.08% | -83.69% | |
61 Neutral | $18.38B | 12.79 | -2.54% | 3.03% | 1.52% | -15.83% | |
55 Neutral | $16.85B | 62.09 | 3.25% | ― | 2.16% | -85.91% |
* Consumer Cyclical Sector Average
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Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.