Fagerhult AB (FAG) AI Stock Analysis

• Market Cap: kr5.16B
• Dividend Yield: 3.46%
• Average Volume (3M): 57.01K
• Price to Earnings (P/E): 16.3
• Beta (1Y): 0.66
• Revenue Growth: -6.23%
• EPS Growth: -37.00%
• Country: SE
• Employees: 3,886
• Sector: Industrials
• Sector Strength: 72
• Industry: Electrical Equipment & Parts
• EPS (TTM): 0.64
• Shares Outstanding: 177,192,840
• 10 Day Avg. Volume: 32,735
• 30 Day Avg. Volume: 57,012
• PEG Ratio: -2.21
• Price to Book (P/B): 1.03
• Price to Sales (P/S): 0.93
• P/FCF Ratio: 0.00
• 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: kr43.00
• Price Target Upside: 6.17% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 1
• EPS Forecast (FY): 2.66
• Revenue Forecast (FY): kr8.36B

• Rating: 56 Neutral
• Price Target: kr38.00 ▼(-6.17% Downside)
• Action: Reiterated Date: 02/18/26
• Date: Action: Reiterated 02/18/26

The score is held back primarily by deteriorating cash generation (2025 free cash flow falling to zero) and compressed profitability, despite strong 2025 revenue growth and manageable leverage. Technicals also weigh on the rating with clear bearish momentum. Valuation is only moderately supportive due to a solid dividend yield but a relatively high P/E versus the recent fundamentals.

Positive Factors

Strong 2025 revenue growth

A 47% revenue increase in 2025 shows the company can win large projects and scale sales across its commercial and public-sector channels. Durable top-line expansion supports fixed-cost absorption and provides capacity to invest in product development and international distribution over the next 2–6 months.

Stable-to-improving gross margin

Consistent gross margin expansion to ~39–40% implies resilient product-level economics and purchasing/sourcing scale. That structural margin at the gross level suggests product cost competitiveness and supports long-term margin recovery if operating expense control improves, underpinning sustainable profitability.

Manageable leverage and sizable equity

Debt around 0.5–0.7x equity provides financial flexibility and a buffer for project-driven working capital swings. A sizable equity base supports balance-sheet resilience, enabling continued investment in manufacturing and systems without immediate refinancing stress over the medium term.

Negative Factors

Free cash flow collapsed in 2025

A fall to zero free cash flow is a structural red flag for cash conversion; it limits the firm's ability to self-fund capex, support working capital in project cycles, and maintain discretionary spending. If persistent, it constrains strategic flexibility and heightens refinancing or external funding needs.

Compressed operating and net margins

Material margin erosion indicates rising operating costs or weaker operating leverage despite revenue growth. Lower operating and net margins reduce retained earnings and ROIC, making it harder to fund growth internally and raising the bar for efficiency improvements to restore durable profitability.

Declining returns on equity

ROE halving to ~4–5% signals weakened capital efficiency and lower shareholder value creation. Persistently low returns can limit reinvestment appeal, reduce strategic optionality, and pressure management to restructure operations or seek higher-return segments to restore sustainable long-term performance.

Fagerhult AB Business Overview & Revenue Model

Company Description

AB Fagerhult (publ.), together with its subsidiaries, provides professional lighting solutions worldwide. It offers indoor and outdoor lighting products that are used in offices, education, healthcare, retail, hospitality and residential, culture, urban spaces, street and pathways, critical infrastructure, and industry and distribution applications under the ateljé Lyktan, iGuzzini, LED Linear, WE-EF, FAGERHULT, LTS, Arlight, Eagle Lighting, Whitecroft, Designplan Lighting, i-Valo, and Veko brand names. The company was formerly known as Fagerhults Elektriska and changed its name to AB Fagerhult (publ.) in 1974. AB Fagerhult (publ.) was founded in 1945 and is headquartered in Habo, Sweden.

How the Company Makes Money

Fagerhult AB generates revenue primarily through the sale of lighting products and systems. The company's revenue model is built on multiple key streams: direct sales to end customers, partnerships with distributors and retailers, and integrated lighting solutions that include installation and maintenance services. Fagerhult also benefits from significant partnerships with construction firms and architectural firms, which help secure large-scale projects. The increasing demand for energy-efficient and sustainable lighting solutions further contributes to its earnings, as the company focuses on innovation and meeting evolving market needs.

Fagerhult AB Financial Statement Overview

Summary

Income statement is mixed: strong 2025 revenue growth (+47%) but materially weaker operating and net margins versus 2022–2023. Balance sheet leverage appears manageable (~0.61x debt/equity in 2025) but returns have cooled. Cash flow is the main drag, with 2025 free cash flow dropping to zero and lower operating cash flow, raising near-term quality concerns.

Income Statement

Revenue has grown over the cycle (2020–2025), including a strong +47% in 2025, but the path has been uneven with declines in 2020 and 2024. Profitability has weakened materially versus 2022–2023: operating margin fell from ~10–11% (2022–2023) to ~6.7% in 2025, and net margin compressed from ~6–7% to ~4.0%. Gross margin is stable-to-improving (~35% in 2020 to ~39–40% in 2023–2025), suggesting the main pressure is operating costs rather than pricing/mix.

Balance Sheet

Leverage looks manageable for the business, with debt running around ~0.5–0.7x equity and ending 2025 at ~0.61x, though it has ticked up versus 2023–2024. Equity is sizable relative to assets, providing balance-sheet support. Returns on equity have cooled meaningfully (roughly ~8–10% in 2020–2022 down to ~4–5% in 2024–2025), reflecting the recent profitability compression.

Cash Flow

Cash generation is volatile. Operating cash flow is positive each year, but it fell sharply in 2022 and remains below the stronger 2023–2024 levels in 2025. Free cash flow was solid in 2023–2024 but dropped to zero in 2025 (down 100%), which is a clear near-term concern. Cash conversion versus earnings is mixed: free cash flow covered a large portion of net income in 2020–2024 (~54–84%), but coverage breaks down in 2025.

Breakdown	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	7.89B	8.31B	8.56B	8.27B	7.09B
Gross Profit	3.12B	3.25B	3.35B	3.12B	2.62B
EBITDA	531.30M	1.17B	1.36B	1.26B	1.11B
Net Income	317.40M	354.30M	543.50M	576.30M	465.50M
Balance Sheet
Total Assets	13.65B	13.71B	13.01B	13.33B	12.65B
Cash, Cash Equivalents and Short-Term Investments	1.31B	1.88B	1.27B	1.29B	1.74B
Total Debt	4.30B	3.97B	3.53B	4.09B	4.17B
Total Liabilities	6.56B	6.25B	5.82B	6.45B	6.43B
Stockholders Equity	7.09B	7.46B	7.18B	6.88B	6.22B
Cash Flow
Free Cash Flow	0.00	750.90M	963.80M	216.80M	646.00M
Operating Cash Flow	740.10M	963.90M	1.21B	402.70M	802.50M
Investing Cash Flow	-1.18B	-259.70M	-225.90M	-192.50M	-266.80M
Financing Cash Flow	-31.80M	-142.70M	-991.00M	-743.30M	-470.10M

Fagerhult AB Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 40.50
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Positive
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SE:FAG, the sentiment is Negative. The current price of 40.5 is above the 20-day moving average (MA) of 34.54, above the 50-day MA of 37.39, and above the 200-day MA of 40.48, indicating a bearish trend. The MACD of -2.37 indicates Positive momentum. The RSI at 19.25 is Positive, neither overbought nor oversold. The STOCH value of 1.20 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for SE:FAG.

Fagerhult AB Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
INT	69 Neutral	kr1.55B	6.99	68.49%	―	191.86%	220.33%
INWI	66 Neutral	kr9.79B	19.03	9.78%	3.37%	3.41%	-1.70%
AQ	65 Neutral	kr17.40B	25.70	15.15%	0.83%	2.60%	3.05%
COOR	64 Neutral	kr5.64B	25.82	10.13%	3.29%	-0.69%	-14.04%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%
FAG	56 Neutral	kr5.16B	16.28	3.57%	3.46%	-6.23%	-37.00%
GARO	47 Neutral	kr663.00M	-38.77	-2.59%	―	-9.58%	76.19%