Signify NV (LIGHT) AI Stock Analysis

• Market Cap: €2.85B
• Dividend Yield: 6.9%
• Average Volume (3M): 1.10M
• Price to Earnings (P/E): 8.1
• Beta (1Y): 1.12
• Revenue Growth: -5.73%
• EPS Growth: 57.95%
• Country: NL
• Employees: 29,697
• Sector: Industrials
• Sector Strength: 89
• Industry: Electrical Equipment & Parts
• EPS (TTM): 0.53
• Shares Outstanding: 128,344,240
• 10 Day Avg. Volume: 502,924
• 30 Day Avg. Volume: 1,102,284
• PEG Ratio: 0.24
• Price to Book (P/B): 1.34
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 16.08
• 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: €24.50
• Price Target Upside: 8.41% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 9

• Rating: 80 Outperform
• Price Target: €25.00 ▲(10.62%Upside)

The stock receives a strong score, primarily driven by its robust technical indicators and attractive valuation metrics. The low P/E ratio and high dividend yield make it an appealing choice for value and income investors. Solid financial performance supports this view, although there are concerns about revenue growth and net profitability. Overall, the stock's technical strength and valuation are key positive factors.

Positive Factors

Growth and Margin Outlook

Growth and margin outlook for Signify is considered better now compared to 2016.

Market Recovery

The recovery in construction markets is expected to drive organic growth and a re-rating in the stock.

Stock Upgrade

Signify has been upgraded to Buy from Neutral, with a price objective increased to €29 from €25.

Negative Factors

EBITA Improvement Challenges

More EBITA improvement is required for the rest of the year, which remains challenging given the current pricing headwind, tariff-induced costs, and negative market conditions in Professional Europe.

Pricing Headwinds

Price/cost in the EBIT bridge is becoming an increasing headwind.

Tariff Impact

The potential direct impact from tariffs and indirect impact from rising competition are unanswered questions in these results.

Signify NV Business Overview & Revenue Model

Company Description

Signify NV is a leading company in the lighting industry, specializing in the development, manufacture, and sale of innovative lighting products and systems. Headquartered in Eindhoven, Netherlands, Signify operates globally, providing energy-efficient lighting solutions across various sectors including residential, commercial, and industrial. The company is well-known for its Philips-branded lighting products, which encompass LED lighting, conventional lamps, and connected lighting systems, catering to a broad range of applications from homes to smart cities.

How the Company Makes Money

Signify NV generates revenue primarily through the sale of its lighting products and solutions. The company's key revenue streams include LED products, which are increasingly popular due to their energy efficiency and long lifespan, and conventional lighting products, which still hold significant market share in various regions. Additionally, Signify is capitalizing on the growing demand for smart lighting systems and Internet of Things (IoT) applications by offering connected lighting solutions for smart homes, offices, and outdoor environments. The company also engages in strategic partnerships with major tech firms and collaborates with city governments to implement smart city lighting projects. These partnerships and projects enhance its market presence and contribute significantly to its earnings by providing integrated, scalable lighting solutions that meet the evolving needs of global markets.

Signify NV Financial Statement Overview

Summary

Signify NV shows a solid financial performance with strengths in operational efficiency and cash flow management. However, challenges in revenue growth and mild pressure on net profitability suggest a need for strategic initiatives to enhance growth and margin improvements. The balance sheet remains stable, but continued monitoring of debt levels is advisable to maintain financial health.

Income Statement

The gross profit margin for TTM is strong at 40.1%, showing efficient cost management. However, the net profit margin decreased from 5.3% in 2022 to 5.7% in TTM, indicating some pressure on net earnings. Revenue has declined over the past years, with a decrease of 2.0% from 2024 to TTM, highlighting a need for growth strategies. The EBIT margin is stable at 8.2%, and the EBITDA margin remains robust at 12.6%, supporting operational efficiency.

Balance Sheet

The debt-to-equity ratio is moderately high at 0.51 in TTM, showing reliance on debt financing. Return on equity (ROE) is healthy at 11.4%, reflecting effective use of equity capital. The equity ratio is stable at 42.4%, indicating a balanced capital structure. The company maintains a solid asset base with total assets at €7.25 billion.

Cash Flow

Free cash flow generation is consistent, although it decreased by 13.7% from 2024 to TTM. The operating cash flow to net income ratio of 1.4 indicates strong cash conversion efficiency. The free cash flow to net income ratio is 1.0, demonstrating efficient cash flow management. Overall, cash flow stability supports financial flexibility.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	6.12B	6.14B	6.70B	7.51B	6.86B	6.50B
Gross Profit	2.46B	2.44B	2.56B	2.73B	2.67B	2.50B
EBITDA	774.00M	773.00M	590.00M	1.04B	827.00M	718.00M
Net Income	351.00M	328.00M	203.00M	523.00M	397.00M	325.00M
Balance Sheet
Total Assets	7.25B	7.60B	8.00B	8.29B	8.26B	7.71B
Cash, Cash Equivalents and Short-Term Investments	644.00M	633.00M	1.16B	676.00M	852.00M	1.03B
Total Debt	1.55B	1.55B	2.23B	2.03B	2.01B	2.31B
Total Liabilities	4.07B	4.33B	5.06B	5.22B	5.66B	5.39B
Stockholders Equity	3.07B	3.16B	2.82B	2.92B	2.46B	2.19B
Cash Flow
Free Cash Flow	358.00M	415.00M	586.00M	244.00M	586.00M	792.00M
Operating Cash Flow	477.00M	514.00M	696.00M	376.00M	704.00M	891.00M
Investing Cash Flow	-87.00M	-72.00M	-115.00M	-256.00M	-91.00M	-1.38B
Financing Cash Flow	-1.15B	-970.00M	-67.00M	-295.00M	-876.00M	757.00M

Signify NV Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 22.60
• 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 NL:LIGHT, the sentiment is Neutral. The current price of 22.6 is above the 20-day moving average (MA) of 22.51, above the 50-day MA of 21.42, and above the 200-day MA of 19.92, indicating a neutral trend. The MACD of 0.35 indicates Positive momentum. The RSI at 52.93 is Neutral, neither overbought nor oversold. The STOCH value of 48.01 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for NL:LIGHT.

Signify NV Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
LIGHT	80 Outperform	€2.85B	8.13	11.61%	6.90%	-5.73%	57.95%
FUR	80 Outperform	€1.34B	4.94	18.89%	5.39%	4.03%	8.35%
TWEKA	76 Outperform	€1.56B	15.21	11.59%	3.95%	-7.30%	-36.81%
NEDAP	73 Outperform	€469.62M	25.72	21.92%	4.42%	-4.12%	-14.85%
AALB	67 Neutral	€3.38B	18.86	7.15%	3.70%	-5.28%	-43.29%
ARCAD	61 Neutral	€3.67B	15.06	21.16%	2.46%	-0.17%	51.55%
Sector *	58 Neutral	HK$13.89B	4.44	-3.01%	7.32%	3.67%	-54.16%