Koninklijke Philips (PHG) AI Stock Analysis

• Market Cap: $26.82B
• Dividend Yield: 3.14%
• Average Volume (3M): 777.78K
• Price to Earnings (P/E): ―
• Beta (1Y): 0.88
• Revenue Growth: -0.76%
• EPS Growth: -55.03%
• Country: US
• Employees: 67,247
• Sector: Healthcare
• Sector Strength: 47
• Industry: Medical - Devices
• EPS (TTM): 0.41
• Shares Outstanding: 962,920,100
• 10 Day Avg. Volume: 705,809
• 30 Day Avg. Volume: 777,784
• PEG Ratio: -0.61
• Price to Book (P/B): 1.90
• Price to Sales (P/S): 1.27
• P/FCF Ratio: 25.56
• Enterprise Value/Market Cap: 1.15
• Enterprise Value/Revenue: 1.72
• Enterprise Value/Gross Profit: 3.92
• Enterprise Value/Ebitda: 13.93
• 1Y Price Target: $29.00
• Price Target Upside: 2.84% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 0

• Rating: 56 Neutral
• Price Target: $29.00 ▲(2.84% Upside)

Philips' overall stock score of 56 reflects its current financial struggles, with declining revenues and profitability challenges being significant concerns. The technical analysis suggests a strong momentum, though caution is advised due to overbought indicators. The earnings call provided a balanced view with some positive outlooks, but valuation remains an issue due to negative earnings. The potential for recovery exists if operational improvements and revenue growth continue.

Positive Factors

Innovation in Cardiovascular Ultrasound

The launch of Transcend Plus with AI enhancements strengthens Philips' position in cardiovascular ultrasound, showcasing its commitment to innovation and potentially driving long-term growth in the healthcare segment.

U.S. Manufacturing Expansion

The $150M investment in U.S. manufacturing and R&D underscores Philips' commitment to expanding its footprint in a key market, enhancing its production capabilities and supporting long-term growth and job creation.

Order Intake Growth

The 6% order intake growth indicates robust demand for Philips' products, particularly in North America, suggesting a strong market position and potential for sustained revenue growth.

Negative Factors

Declining Revenue Trend

The ongoing decline in revenue since 2020 highlights challenges in maintaining sales momentum, which could impact long-term profitability and market competitiveness if not addressed.

Profitability Challenges

Persistent profitability challenges, marked by declining revenues and net losses, threaten Philips' financial stability and ability to invest in growth initiatives, necessitating strategic improvements.

Challenges in China

Ongoing challenges in China, a significant market, could hinder Philips' growth prospects and require strategic adjustments to counteract subdued demand and market recovery issues.

Koninklijke Philips Business Overview & Revenue Model

Company Description

Koninklijke Philips N.V. operates as a health technology company in North America and internationally. It operates through Diagnosis & Treatment Businesses, Connected Care Businesses, and Personal Health Businesses segments. The company provides diagnostic imaging solutions, includes magnetic resonance imaging, computed tomography (CT) systems, X-ray systems, and detector-based spectral CT solutions, as well as molecular and hybrid imaging solutions for nuclear medicine; integrated interventional systems; echography solutions focused on diagnosis, treatment planning and guidance for cardiology, general imaging, obstetrics/gynecology, and point-of-care applications; proprietary software to enable diagnostics and intervention; and enterprise diagnostic informatics products and services. It also offers acute patient management solutions; emergency care solutions; sleep and respiratory care solutions; and electronic medical record and care management solutions. In addition, the company provides power toothbrushes, brush heads, and interdental cleaning and teeth whitening products; infant feeding and digital parental solutions; and male grooming and beauty products and solutions. It has a strategic collaboration with Ibex Medical Analytics Ltd. to jointly promote the digital pathology and AI solutions to hospitals, health networks, and pathology laboratories worldwide, as well as a strategic partnership agreement with NICO.LAB. The company was formerly known as Koninklijke Philips Electronics N.V. and changed its name to Koninklijke Philips N.V. in May 2013. Koninklijke Philips N.V. was founded in 1891 and is headquartered in Amsterdam, the Netherlands.

How the Company Makes Money

Philips generates revenue through diverse streams across its three main sectors: healthcare, consumer lifestyle, and lighting. The healthcare division is the largest contributor, offering products such as imaging systems, patient monitoring solutions, and healthcare informatics that are sold to hospitals and healthcare providers. The consumer lifestyle segment includes personal health products like electric toothbrushes and kitchen appliances, which are marketed directly to consumers and through retail partnerships. The lighting division, although transitioning towards LED and connected lighting solutions, continues to provide revenue through traditional products. Key revenue streams also come from long-term service contracts, software subscriptions, and partnerships with healthcare institutions, enhancing customer loyalty and recurring revenue. Philips' strategic alliances with organizations, such as healthcare providers and technology firms, further bolster its market position and revenue potential.

Koninklijke Philips Financial Statement Overview

Summary

Koninklijke Philips faces profitability challenges with declining revenues and net losses, though operational improvements have led to some signs of stabilization. The balance sheet remains stable, but the equity position is under pressure. Positive cash flows indicate resilience, highlighting the need for enhanced earnings quality.

Income Statement

Koninklijke Philips has experienced a declining revenue trend from its peak in 2020. The gross profit margin has also decreased over the years, indicating challenges in cost management or pricing power. The company has been suffering net losses in recent years, which impacts the net profit margin negatively. The EBIT margin is low, though there has been an improvement in the latest year, suggesting some operational recovery. Overall, the income statement reflects a company facing profitability challenges with some signs of stabilization.

Balance Sheet

The balance sheet shows a moderate debt-to-equity ratio, which suggests a balanced leverage position but with room for improvement. The equity ratio indicates a relatively stable financial foundation, though the decline in stockholders' equity over recent years could be a concern. Return on equity is negative due to net losses, highlighting the need for improved profitability. Overall, the balance sheet reveals a stable yet potentially vulnerable position due to ongoing losses.

Cash Flow

Philips has managed to generate positive operating cash flow, with free cash flow remaining positive recently, despite capital expenditures. The free cash flow growth rate has been fluctuating, reflecting challenges in maintaining consistent cash generation. The operating cash flow to net income ratio is healthy, indicating that cash generation is stronger than earnings performance would suggest. Overall, the cash flow statement shows resilience in cash management but underscores the need to enhance earnings quality.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	17.86B	18.02B	18.17B	17.83B	17.16B	19.54B
Gross Profit	7.83B	7.77B	7.45B	7.19B	7.17B	8.78B
EBITDA	2.21B	1.92B	1.04B	115.00M	2.00B	2.75B
Net Income	162.00M	-702.00M	-466.00M	-1.61B	3.32B	1.19B
Balance Sheet
Total Assets	26.38B	28.98B	29.41B	30.69B	30.96B	27.71B
Cash, Cash Equivalents and Short-Term Investments	1.82B	2.40B	1.87B	1.18B	2.31B	3.23B
Total Debt	8.43B	7.49B	7.29B	8.20B	6.98B	6.93B
Total Liabilities	15.97B	16.93B	17.34B	17.41B	16.49B	15.81B
Stockholders Equity	10.38B	12.01B	12.03B	13.25B	14.44B	11.87B
Cash Flow
Free Cash Flow	279.00M	893.00M	1.49B	-979.00M	866.00M	2.15B
Operating Cash Flow	1.10B	1.57B	2.14B	-173.00M	1.63B	2.64B
Investing Cash Flow	-382.00M	-573.00M	-636.00M	-1.49B	-3.67B	-1.27B
Financing Cash Flow	498.00M	-496.00M	-848.00M	500.00M	-2.35B	483.00M

Koninklijke Philips Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 28.20
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For PHG, the sentiment is Positive. The current price of 28.2 is above the 20-day moving average (MA) of 27.76, above the 50-day MA of 26.47, and above the 200-day MA of 25.07, indicating a bullish trend. The MACD of 0.48 indicates Positive momentum. The RSI at 59.93 is Neutral, neither overbought nor oversold. The STOCH value of 86.01 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for PHG.

Koninklijke Philips Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
ABT	79 Outperform	$232.75B	16.72	31.01%	1.73%	5.85%	152.28%
SYK	75 Outperform	$146.55B	50.72	14.25%	0.87%	11.36%	-15.66%
BSX	75 Outperform	$154.61B	61.13	11.71%	―	21.45%	36.19%
DXCM	73 Outperform	$29.89B	53.36	22.83%	―	9.30%	-14.95%
PHG	56 Neutral	$26.82B	―	-7.10%	3.14%	-0.76%	-55.03%
Sector *	51 Neutral	$7.92B	-0.36	-43.38%	2.24%	22.38%	-2.16%
SSKN	47 Neutral	$8.27M	―	-235.41%	―	0.36%	-17.20%