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Saab AB Unsponsored ADR (SAABY)
OTHER OTC:SAABY
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Saab AB Unsponsored ADR
(OTC:SAABY)
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Rating:71Outperform
Price Target:
$40.00
▲(51.29% Upside)
Action:ReiteratedDate: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 (SAABY) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$39.04B
Dividend Yield0.27%
Average Volume (3M)69.06K
Price to Earnings (P/E)60.5
Beta (1Y)0.52
Revenue Growth27.43%
EPS Growth35.56%
CountryUS
Employees25,369
SectorIndustrials
Sector Strength72
IndustryAerospace & Defense
Share Statistics
EPS (TTM)0.25
Shares Outstanding1,067,695,600
10 Day Avg. Volume31,105
30 Day Avg. Volume69,056
Financial Highlights & Ratios
PEG Ratio1.09
Price to Book (P/B)6.61
Price to Sales (P/S)3.62
P/FCF Ratio50.88
Enterprise Value/Market Cap9.16
Enterprise Value/Revenue4.53
Enterprise Value/Gross Profit20.84
Enterprise Value/Ebitda38.96
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
Saab AB Unsponsored ADR Business Overview & Revenue Model
Company DescriptionSaab AB is a Swedish aerospace and defense company that specializes in the development and production of advanced technology solutions for military and civilian applications. The company operates through various segments, including Defense and Security, which encompasses products such as fighter aircraft, submarine systems, and radar technology, as well as civil security solutions. Saab is known for its innovative engineering and commitment to sustainability, offering products that enhance the capabilities of armed forces as well as contributing to societal safety and security.
How the Company Makes MoneySaab 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 Earnings Call Summary
Earnings Call Date:Feb 06, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:Apr 24, 2026
Earnings Call Sentiment Positive
The call was broadly positive: Saab reported record order intake, a very large SEK 275 billion backlog, strong organic sales growth (~25%), substantial EBIT improvement (+37% year) and excellent cash generation (cash conversion ~68%), and upgraded medium‑term revenue targets. Business areas Dynamics, Surveillance, Kockums and Aeronautics showed momentum with notable contract wins (Gripen Colombia, GlobalEye, Poland A26 selection). Key challenges noted were cash‑flow volatility, supply‑chain/material constraints, capacity ramp needs and program‑specific issues such as the T‑7 under‑absorption and remaining unprofitable items in Surveillance. Political/timing risks around some large platform contracts remain. Overall the positives (record orders, strong financials, backlog and upgraded targets) outweigh the execution and timing risks.Q4-2025 Updates
Positive Updates
Record Order Intake and Large Backlog
Order bookings SEK 169 billion in 2025 with an exceptionally strong Q4 order intake of SEK 100 billion (versus SEK 17 billion in Q4 2024, ~+488%), resulting in a record backlog of SEK 275 billion (≈3.5x 2025 sales).
Strong Revenue Growth
Group sales approximately SEK 79–80 billion for 2025, with organic sales growth around 25% (reported growth c. 24.1% / organic 25.6% referenced), underpinning the upgraded medium‑term revenue ambition.
Substantial Profitability Improvement
Full‑year EBIT grew ~37% to an EBIT margin of 9.8% (up from 8.9% prior year). Q4 EBIT growth was especially strong at ~50% year‑over‑year.
Very Strong Cash Generation and Balance Sheet
Operating cash flow around SEK 12 billion for the year, cash conversion ~68% (above the >60% mid‑term target). Net liquidity improved to SEK ~4 billion; cash & liquid investments SEK 18.7 billion plus SEK 6 billion unutilized RCF.
Upgraded Medium‑Term Targets
Medium‑term revenue target upgraded to 22% average growth for '23–'27 (implies roughly 20% average for 2026–27). Reiterated targets to grow EBIT faster than sales and maintain cash conversion >60%.
Business Area Momentum — Dynamics
Dynamics recorded very high demand with a backlog of SEK 90 billion, strong capacity investments and reported growth (quarter‑to‑quarter growth cited ~50%); full‑year EBIT growth for Dynamics ~46% and full‑year EBIT margin ~18.1%.
Business Area Momentum — Surveillance and Key Wins
Surveillance saw strong execution and deliveries (Q4 EBIT growth ~83%). Notable contract wins include GlobalEye orders (France and activities for Sweden) and continuing demand for sensors and EW equipment.
Kockums Selection by Poland
Selection by Poland for A26 submarines (major strategic/platform win), supporting increased submarine capacity and industrial collaboration; Saab Kockums reported ~20% growth and strong project execution.
Aeronautics Contracts and Expansion
Gripen E contract for Colombia (EUR 3.1 billion) progressing as planned; increased Gripen production capacity (Sweden and Brazil) and ongoing discussions for further sovereign/industrial collaborations (e.g., Canada, Ukraine).
Sustainability and Governance Progress
Adopted a human rights due diligence policy; share of women in management increased to 29%; emissions reduced 7% YoY and company is at ~36% reduction toward a 42% 2030 target; top CDP rankings (top ~4%).
Dividend and Returns to Shareholders
Board proposes a 20% higher dividend, SEK 2.40 per share, reflecting strong cash flows and balance sheet strength.
Investments to Support Growth
CapEx increased to SEK 7.2 billion in 2025 (from SEK 4.8 billion prior year, ~+50%), with continued planned investments in new factories (U.S., India), capacity and R&D to meet demand.
Negative Updates
Quarterly Cash Flow Volatility
Management emphasized significant volatility in operational cash flow across quarters despite a strong full‑year outcome; timing of milestone payments and deliveries can create large quarter‑to‑quarter swings.
T‑7 Program Under‑absorption and Delayed Profitability
T‑7 production is still affected by under‑absorption in West Lafayette; only a few of 350 contracted aircraft delivered so far and the program is expected to be unprofitable for several years with anticipated positive contribution not before ~2028–2029.
Surveillance One‑off Impact from Divestment
Divestment of TransponderTech negatively impacted Surveillance's operating income by SEK 336 million in the quarter, creating a near‑term drag on reported EBIT for the segment.
Margin Pressure and Project Mix in Dynamics
Although Dynamics reported strong growth, Q4 margins were lower year‑over‑year due to project mix effects (management noted the margin was somewhat lower in Q4 compared to prior year quarter).
Supply‑Chain and Material Constraints
Management highlighted supply‑chain and material availability as ongoing constraints across several areas; securing supplier capacity and prioritization in a broad ecosystem is a key execution risk as volumes ramp.
Capacity Ramp Requirements and Investment Burden
Significant step‑up in capacity (new facilities in U.S., India, expansions in Sweden) and high sustained CapEx requirements are needed to meet upgraded targets; execution risk exists in timing and filling new capacity.
Political and Timing Risks for Large Platform Contracts
Some large platform wins are subject to political decisions and contracting timing (e.g., Poland A26 contract not yet finalized, NATO/GlobalEye decisions), introducing timing and execution risk despite selection announcements.
Remaining Unprofitable Business in Surveillance
Management acknowledged remaining unprofitable/underperforming business within Surveillance that is still being managed or restructured; work ongoing but not yet fully resolved.
Limited Forward Margin Guidance
Management declined to provide explicit operational margin guidance for 2026, reflecting uncertainty around mix, campaign timing and political decisions—introducing forecasting ambiguity.
Company Guidance
Saab upgraded its medium‑term revenue target to 22% average growth over 2023–27 (implying roughly 20% average in 2026–27) and reiterated that EBIT should grow faster than sales and that cash conversion should stay above 60%. The company enters 2026 with a record backlog of SEK 275bn (3.5x 2025 sales) after SEK 169bn in order bookings in 2025 (SEK 100bn in Q4); 2025 results were sales SEK ~79bn (+24.1% reported, +25.6% organic), EBIT +37% to a 9.8% margin and EPS/net income +51%. Operational cash flow was ~SEK 12bn with cash conversion 68%, investments SEK 7.2bn (R&D doubled and CapEx tripled vs prior years), ROCE 16.5%, net liquidity SEK 4bn (cash & liquid investments SEK 18.7bn) and an unused SEK 6bn revolving credit; the Board proposes a SEK 2.40/share dividend (+20%).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.82
Very Positive
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.74
Positive
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.68
Positive
| 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
Positive
26.44
Price Trends
34.40
Positive
30.63
Positive
28.51
Positive
Market Momentum
0.22
Positive
50.68
Neutral
63.99
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 37.07, below the 50-day MA of 34.40, and below the 200-day MA of 28.51, indicating a neutral trend. The MACD of 0.22 indicates Positive momentum. The RSI at 50.68 is Neutral, neither overbought nor oversold. The STOCH value of 63.99 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
UnderperformOutperform
Sector (63)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
77 Outperform | $103.28B | 25.02 | 26.17% | 1.55% | -0.14% | 72.35% | |
75 Outperform | $66.17B | 41.56 | 8.20% | 1.61% | 2.83% | 47.00% | |
74 Outperform | $94.96B | 22.72 | 17.66% | 1.73% | 11.86% | 17.39% | |
74 Outperform | $152.87B | 30.92 | 76.87% | 2.77% | 2.88% | -35.15% | |
71 Outperform | $39.04B | 60.54 | 13.59% | 0.27% | 27.43% | 35.56% | |
63 Neutral | $10.79B | 15.43 | 7.44% | 2.01% | 2.89% | -14.66% | |
56 Neutral | $34.92B | 341.08 | 10.03% | ― | 31.77% | -15.34% |
* Industrials Sector Average
SAABY
Saab AB Unsponsored ADR
35.91
21.13
142.97%
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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.