Fagerhult AB (FAG) AI Stock Analysis

• Market Cap: kr4.80B
• Dividend Yield: 3.46%
• Average Volume (3M): 57.01K
• Price to Earnings (P/E): 23.1
• Beta (1Y): 0.68
• 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: kr28.00 ▼(-30.86% 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

Revenue Growth

A 47% revenue increase in 2025 indicates durable demand recovery and an ability to win larger project work. For a professional lighting group this suggests expanding specification wins and channel traction, supporting scale economies and long-term revenue visibility tied to energy-efficient upgrades.

Manageable Leverage

Debt around 0.5–0.7x equity and sizeable equity provide balance-sheet flexibility. That leverage profile supports capital spending for product development and project execution, lets the company pursue tenders and sustain distributions, and reduces refinancing strain in normal cycles.

Gross Margin Stability

Stable-to-rising gross margins imply core product economics and sourcing scale remain intact despite operating cost pressure. This points to lasting pricing power or favorable mix in luminaires, insulating profitability at the gross level and enabling margin recovery if operating costs are controlled.

Negative Factors

Free Cash Flow Collapse

A drop to zero FCF materially weakens the company's ability to fund capex, R&D for connected lighting, and working-capital swings from project deliveries. Zero FCF raises financing risk for growth initiatives and limits capacity to rebuild cash buffers or accelerate deleveraging over the next several quarters.

Operating Margin Compression

A meaningful drop in operating margin signals higher structural operating costs or lower operating leverage on sales. That weakens cash generation and return on incremental revenue, reducing internal funding for innovation and making earnings more sensitive to cyclical project volumes and cost inflation.

Eroding Returns on Equity

ROE falling to mid-single digits shows lower capital efficiency and weaker returns on invested capital. Persistently low ROE can constrain reinvestment economics, increase reliance on external capital for expansion, and reduce shareholder return potential absent operational improvement.

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 makes money primarily by selling professional lighting products and solutions (luminaires and lighting systems) to business and institutional customers. Revenue is generated through project-based sales (e.g., lighting for offices, education, healthcare, retail, industrial and public environments) as well as ongoing product sales via established distribution channels. The company typically earns income from (1) product sales of indoor and outdoor luminaires, (2) solution-oriented deliveries where lighting design/support, specification work, and project management are bundled around the product sale, and (3) aftermarket and replacement demand tied to upgrades and renovations. Sales are executed through a mix of direct sales to large accounts and projects and indirect routes such as electrical wholesalers, installers, and other channel partners, with the mix varying by geography and brand. Key earnings drivers generally include scale in manufacturing and sourcing, the ability to win specified projects through strong brands and lighting expertise, and the shift toward energy-efficient and connected lighting upgrades that increase demand for modern luminaires and systems.

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: Negative
• RSI: Neutral
• STOCH: Neutral

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 28.14, above the 50-day MA of 33.31, and above the 200-day MA of 39.22, indicating a bearish trend. The MACD of -1.65 indicates Negative momentum. The RSI at 31.34 is Neutral, neither overbought nor oversold. The STOCH value of 24.14 is Neutral, 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
INWI	66 Neutral	kr8.35B	18.51	9.42%	3.37%	3.41%	-1.70%
AQ	65 Neutral	kr16.87B	26.72	15.15%	0.83%	2.60%	3.05%
COOR	64 Neutral	kr5.77B	21.43	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	kr4.80B	23.08	3.57%	3.46%	-6.23%	-37.00%
GARO	47 Neutral	kr571.00M	-48.91	-2.59%	―	-9.58%	76.19%