Saab AB Unsponsored ADR (SAABY) AI Stock Analysis

• Market Cap: $38.70B
• Dividend Yield: 0.27%
• Average Volume (3M): 69.06K
• Price to Earnings (P/E): 60.4
• Beta (1Y): 0.53
• Revenue Growth: 27.43%
• EPS Growth: 35.56%
• Country: US
• Employees: 25,369
• Sector: Industrials
• Sector Strength: 72
• Industry: Aerospace & Defense
• EPS (TTM): 0.25
• Shares Outstanding: 1,067,695,600
• 10 Day Avg. Volume: 31,105
• 30 Day Avg. Volume: 69,056
• PEG Ratio: 1.09
• Price to Book (P/B): 6.61
• Price to Sales (P/S): 3.62
• P/FCF Ratio: 50.88
• Enterprise Value/Market Cap: 9.31
• Enterprise Value/Revenue: 4.57
• Enterprise Value/Gross Profit: 20.99
• Enterprise Value/Ebitda: 39.24
• 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: 71 Outperform
• Price Target: $40.00 ▲(51.29% Upside)
• Action: Reiterated Date: 02/08/26
• Date: Action: Reiterated 02/08/26

The score is driven primarily by improved profitability and solid balance-sheet positioning, supported by a constructive earnings call with raised growth guidance and strong backlog. Offsetting factors are inconsistent cash conversion, mixed near-term technical momentum, and a high P/E that makes valuation less attractive despite the strong dividend yield.

Positive Factors

Backlog & Order Intake

A SEK 202B+ backlog with a 1.3x book-to-bill gives multi-year revenue visibility and reduces near-term cyclicality. Durable government programs embed long delivery schedules and milestone billing, supporting stable future revenues and planning for production, staffing and supplier commitments.

Structural Profitability Improvement

Multi-year margin expansion (operating margin ~3.9% in 2020 to ~10.3% in 2025) indicates scalable cost structure and improved program execution. Sustained higher margins enhance earnings resilience across cycles and enable reinvestment into R&D and lifecycle services, strengthening long-term competitiveness.

Improved Balance Sheet & Returns

Lower leverage and materially higher ROE reflect stronger capital efficiency and financial flexibility. Manageable debt levels in a capital-intensive defence business support bidding on large programs, funding of multi-year projects and shareholder returns without immediate liquidity strain.

Negative Factors

Inconsistent Cash Conversion

Free cash flow trailing net income and historical volatility limit durable internal funding for capex, dividends and debt paydown. Reliance on lumpy milestone receipts across long programs raises execution risk and constrains ability to convert improved accounting profits into predictable cash over the medium term.

T-7 Program Profitability Drag

Multi-year T-7 startup costs will structurally depress Aeronautics margins and overall company profitability for several years. Sustained program investment can weigh on free cash flow, require continued capital allocation to ramp activity, and complicate margin comparability during execution.

Rising Debt & Working-Capital Demands

A notable debt increase and rapid asset growth elevate execution and working-capital requirements. If program timings shift or revenue growth slows, elevated debt plus higher inventory/receivables could pressure liquidity and cash conversion, constraining flexibility for new contract bids or strategic investments.

Saab AB Unsponsored ADR Business Overview & Revenue Model

Company Description

Saab AB (publ) provides products, services, and solutions for the military defense, aerospace, and civil security markets worldwide. The company operates through five segments: Aeronautics, Dynamics, Surveillance, Kockums, and Combitech. The company develops military and civil aviation technology, as well as conducts studies on manned and unmanned aircraft systems. It also provides ground combat weapons, missile systems, torpedoes, unmanned underwater vehicles, training and simulation systems, and signature management systems for armed forces; and niche products for the civil and defense market, such as underwater vehicles for the offshore industry. In addition, the company offers solutions for safety and security, surveillance and decision support, and threat detection, location, and protection, which include airborne, ground-based and naval radar, electronic warfare, and combat systems, as well as C4I solutions. Further, it provides product integration, support, technical maintenance, and logistics services, as well as products, solutions, and services. Additionally, the company offers technology for traffic management and public safety; and supports industry, defense, and public sectors with services comprising cyber security, artificial intelligence, and big data analysis. It also provides submarines with the Stirling system for air independent propulsion, surface combatants, mine hunting systems, and autonomous vessels; and systems development, systems integration, information security, systems security, communications, mechanics, and technical product information. Saab AB (publ) was founded in 1937 and is headquartered in Stockholm, Sweden.

How the Company Makes Money

Saab AB generates revenue primarily through the sale of defense and security products and services. Key revenue streams include contracts for military aircraft, such as the Gripen fighter jet, and naval systems like submarines and surface vessels. The company also earns from maintenance, repair, and overhaul services, as well as providing training and simulation solutions to defense forces. Significant partnerships with governments and defense organizations, both in Sweden and internationally, contribute to long-term contracts and projects, which bolster revenue stability. Additionally, Saab participates in collaborative defense programs and joint ventures that further expand its market reach and product offerings.

Saab AB Unsponsored ADR Financial Statement Overview

Summary

Strong multi-year improvement in scale and profitability (operating margin ~3.9% in 2020 to ~10.3% in 2025; net margin ~3.0% to ~8.0%), with better ROE (~14.6% in 2025) and manageable leverage (debt-to-equity improving to ~0.34). Offsets include cash-flow volatility and only moderate earnings-to-free-cash conversion (FCF about half of net income in 2025), plus a notable debt increase in 2025.

Income Statement

Revenue growth has accelerated materially, rising from ~7% (2022) and ~23% (2023–2024) to ~9.8% in 2025, alongside a clear step-up in profitability (net margin improving from ~3.0% in 2020 to ~8.0% in 2025). Operating performance also strengthened, with operating margin expanding from ~3.9% (2020) to ~10.3% (2025) and EBITDA margin now ~13%. Weaknesses: gross margin has been fairly range-bound around ~21–22% since 2021 (limited mix/price expansion), and 2025 EBITDA margin was slightly lower than 2023, suggesting some cost pressure despite stronger scale.

Balance Sheet

Leverage looks manageable for the industry, with debt-to-equity improving from ~0.47 (2020) to ~0.34 (2025), and equity expanding steadily over the period. Profitability on shareholders’ capital has also improved meaningfully (return on equity rising from ~5.0% in 2020 to ~14.6% in 2025). Offsetting this, total debt increased notably in 2025 versus 2024, and the asset base has grown quickly—good for scale, but it can raise execution and working-capital demands if growth cools.

Cash Flow

Cash generation improved sharply in 2025, with operating cash flow rising strongly and free cash flow jumping to ~5.6B (free cash flow growth ~146% vs. 2024). However, cash conversion remains a watch item: free cash flow is about half of net income in 2025 (better than 2024 but below 2021), and cash flow metrics have been volatile year-to-year (notably weak 2024 free cash flow versus 2023). Overall, profitability is translating into cash, but not consistently at a high rate.

Breakdown	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	79.15B	63.75B	51.61B	42.01B	39.15B
Gross Profit	17.17B	13.66B	11.26B	8.89B	8.21B
EBITDA	9.48B	8.49B	7.21B	4.70B	4.26B
Net Income	6.31B	4.17B	3.38B	2.19B	1.93B
Balance Sheet
Total Assets	124.70B	99.82B	82.76B	72.36B	65.04B
Cash, Cash Equivalents and Short-Term Investments	15.36B	11.74B	13.71B	12.86B	11.84B
Total Debt	14.71B	10.38B	10.04B	9.99B	9.72B
Total Liabilities	81.03B	64.01B	50.40B	42.49B	41.79B
Stockholders Equity	43.34B	35.50B	32.03B	29.49B	22.98B
Cash Flow
Free Cash Flow	5.63B	1.89B	2.92B	2.34B	3.19B
Operating Cash Flow	11.38B	6.73B	6.46B	4.65B	5.71B
Investing Cash Flow	-11.64B	-4.18B	-5.92B	-2.44B	-4.70B
Financing Cash Flow	647.00M	-1.93B	-1.23B	-1.18B	-1.64B

Saab AB Unsponsored ADR Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 26.44
• 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 SAABY, the sentiment is Positive. The current price of 26.44 is below the 20-day moving average (MA) of 36.49, below the 50-day MA of 34.92, and below the 200-day MA of 28.70, indicating a neutral trend. The MACD of 0.10 indicates Positive momentum. The RSI at 50.35 is Neutral, neither overbought nor oversold. The STOCH value of 53.95 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for SAABY.

Saab AB Unsponsored ADR Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
NOC	77 Outperform	$102.81B	24.91	26.17%	1.55%	-0.14%	72.35%
LHX	75 Outperform	$68.09B	42.76	8.20%	1.61%	2.83%	47.00%
GD	74 Outperform	$96.54B	23.10	17.66%	1.73%	11.86%	17.39%
LMT	74 Outperform	$151.41B	30.63	76.87%	2.77%	2.88%	-35.15%
SAABY	71 Outperform	$38.70B	60.36	13.59%	0.27%	27.43%	35.56%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%
AXON	60 Neutral	$43.61B	355.65	4.48%	―	31.77%	-15.34%