HMS Networks AB (HMS) AI Stock Analysis

• Market Cap: kr20.12B
• Dividend Yield: N/A
• Average Volume (3M): 28.58K
• Price to Earnings (P/E): 46.3
• Beta (1Y): 1.12
• Revenue Growth: 13.97%
• EPS Growth: 20.46%
• Country: SE
• Employees: 1,100
• Sector: Technology
• Sector Strength: 88
• Industry: Communication Equipment
• EPS (TTM): 1.93
• Shares Outstanding: 50,318,867
• 10 Day Avg. Volume: 37,917
• 30 Day Avg. Volume: 28,579
• PEG Ratio: 1.32
• Price to Book (P/B): 6.05
• Price to Sales (P/S): 5.88
• P/FCF Ratio: 25.80
• 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: 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: 67 Neutral
• Price Target: kr445.00 ▲(10.92% Upside)

Score is driven primarily by strong financial performance (high margins and improving free cash flow) and a constructive earnings call showing margin outperformance and cash generation, partially offset by demanding valuation (P/E ~47) and a mixed technical picture with the stock still below key longer-term moving averages.

Positive Factors

High gross and operating margins

Sustained high gross margin (~63%) and robust EBIT margin indicate differentiated, high‑value connectivity products and pricing power. Durable margin structure supports reinvestment, R&D and margin resilience versus peers, reducing reliance on volume recovery for profitability.

Strong cash generation and conversion

Consistent FCF growth and an 82% cash conversion ratio underpin self‑funding capacity for capex, capacity upgrades and acquisitions. This strengthens liquidity and lowers refinancing risk, enabling strategic investments without immediate dependence on external capital.

Acquisitions and division-level strength

Targeted M&A (Molex, Red Lion, PEAK) and strong INT/IDS division results expand addressable market, lift gross margins and enable cross‑sell. Acquisitions add recurring revenue and scale, improving long‑term growth optionality and product breadth across industrial connectivity.

Negative Factors

Currency headwinds

A ~10% FX hit to orders and a ~SEK‑15m EBIT drag show exchange rates materially affect reported demand and margins. With hedges rolling off, FX volatility can persistently depress revenue visibility and reported profitability over the next several quarters.

Planned OpEx and investment ramp in 2026

Management’s deliberate OpEx ramp and ERP/capacity investments will increase fixed costs before volume benefits materialize. This creates a multi‑quarter margin headwind and higher cash burn risk until productivity and revenue synergies from those investments are realized.

North America project volatility and order lumpiness

Dependence on large, project‑driven orders in North America produces lumpiness and low near‑term visibility. Timing shifts of a few projects can swing quarterly results materially, complicating planning and making short‑term revenue and margin forecasts less reliable.

HMS Networks AB Business Overview & Revenue Model

Company Description

HMS Networks AB (publ) provides industrial communication and industrial Internet of Things solutions under the Anybus, Ewon, IXXAT, and Intesis brands worldwide. The company offers Anybus Embedded that offers multi-network connectivity with a single development project; Anybus Gateways, a gateway for connecting devices, machines, systems, or networks; Anybus Wireless that allows to connect machines and devices over Bluetooth, Wi-Fi, cellular networks, and industrial Ethernet; and Anybus Edge, which bridges edge intelligence and versatile cloud connectivity to industrial equipment. It also provides Ewon Cosy+, an industrial VPN device for secure remote access; Ewon Flexy, an industrial device and IIoT gateways for flexible remote access and data services; Ewon Flexy Extension Cards, which allow to keep up with the evolution of communication technologies while protecting investment in the device; and Ewon Talk2M, an industrial cloud that enables its customers to access their assets. In addition, the company offers Intesis protocol translators, air conditioner interfaces, AC Cloud control, and ST cloud control solutions; and automotive, embedded control, energy, and safety solutions under the Ixxat brand. It also offers its solutions to device manufactures, machine builders, system integrators, and end users. HMS Networks AB (publ) was founded in 1988 and is headquartered in Halmstad, Sweden.

How the Company Makes Money

HMS Networks generates revenue primarily through the sale of its communication products and solutions, including gateways, routers, and protocol converters that enable seamless connectivity in industrial environments. Key revenue streams include direct sales to end-users, distribution through partners, and recurring revenue from services such as software licenses and technical support. The company also benefits from strategic partnerships with major players in the industrial automation sector, enhancing its market reach and product offerings. Additionally, HMS invests in research and development to continuously innovate and adapt its product portfolio, which contributes to its long-term revenue growth.

HMS Networks AB Financial Statement Overview

Summary

Strong profitability and improving 2025 performance (gross margin ~63%, operating margin up to ~21%) with solid and rising free cash flow (FCF 815m; ~0.93x net income). Offsets include recent net margin volatility (sharp drop in 2024, partial recovery in 2025) and a leverage profile that is higher than earlier years despite improvement in 2025 (debt-to-equity ~0.70).

Income Statement

Profitability is strong for the industry, with 2025 gross margin ~63% and operating profitability improving meaningfully (operating margin rising from ~16% in 2024 to ~21% in 2025). Revenue growth re-accelerated in 2025 (~4% vs ~1% in 2024), but remains below the higher-growth years earlier in the period. A key weakness is earnings volatility: net margin fell sharply from ~19–20% (2022–2023) to ~10% in 2024 before partially recovering to ~12% in 2025.

Balance Sheet

The balance sheet shows moderate leverage in the last two years, with debt-to-equity around ~0.90 in 2024 improving to ~0.70 in 2025, alongside steady equity levels. Returns on shareholders’ capital have also improved (ROE ~9% in 2024 to ~13% in 2025), but remain well below the very strong levels seen in 2021–2023 (~30%+). Overall, the recent step-up in leverage versus earlier years is the main constraint, even though the 2025 direction is improving.

Cash Flow

Cash generation is solid and improving: 2025 operating cash flow rose to 878m and free cash flow to 815m, with free cash flow growth strong (~13%) versus near-flat growth in 2024. Cash conversion is generally healthy, with free cash flow close to reported earnings (about 0.93x net income in 2025). A watch-out is that operating cash flow coverage of earnings is only modest in 2025 (~1.04x) and was below 1x in 2022–2024, indicating periods where cash conversion was less consistent.

Breakdown	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	3.58B	3.06B	3.02B	2.51B	1.97B
Gross Profit	2.25B	1.92B	1.97B	1.58B	1.23B
EBITDA	1.03B	703.15M	854.88M	740.44M	554.26M
Net Income	435.00M	309.68M	570.64M	507.79M	354.85M
Balance Sheet
Total Assets	6.60B	7.50B	3.01B	2.73B	2.20B
Cash, Cash Equivalents and Short-Term Investments	89.00M	73.93M	124.03M	144.17M	172.17M
Total Debt	2.43B	3.16B	267.38M	298.59M	84.14M
Total Liabilities	3.12B	3.99B	1.08B	1.12B	1.03B
Stockholders Equity	3.48B	3.50B	1.93B	1.61B	1.18B
Cash Flow
Free Cash Flow	815.00M	471.00M	445.00M	348.06M	469.30M
Operating Cash Flow	878.00M	592.02M	518.86M	431.11M	508.49M
Investing Cash Flow	-135.00M	-4.45B	-135.12M	-365.93M	-100.04M
Financing Cash Flow	-715.00M	3.83B	-400.23M	-98.96M	-320.86M

HMS Networks AB Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 401.20
• 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:HMS, the sentiment is Negative. The current price of 401.2 is above the 20-day moving average (MA) of 398.59, below the 50-day MA of 430.57, and below the 200-day MA of 436.84, indicating a neutral trend. The MACD of -8.24 indicates Negative momentum. The RSI at 45.21 is Neutral, neither overbought nor oversold. The STOCH value of 44.86 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for SE:HMS.

HMS Networks AB Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
HTRO	70 Outperform	kr4.81B	37.35	3.38%	―	0.01%	-71.63%
HMS	67 Neutral	kr20.12B	46.28	12.77%	―	13.97%	20.46%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
EPEN	60 Neutral	kr3.43B	22.54	9.68%	1.11%	-1.85%	-16.44%
IVSO	57 Neutral	kr12.03B	56.74	21.88%	0.87%	5.69%	4.82%
MAVEN	53 Neutral	kr257.28M	-37.78	-5.81%	―	-9.79%	-144.24%
NETI.B	43 Neutral	kr725.28M	125.43	0.87%	―	-15.56%	-92.87%

HMS Networks AB Corporate Events

HMS Networks Delivers Record 2025 Profit and Bolsters Industrial Communications Portfolio

HMS Networks AB reported a strong 2025, with fourth-quarter net sales up 18% year-on-year and full-year net sales rising 17%, underpinned by solid organic growth, record deliveries and an adjusted operating margin improving to 28.2% in the quarter and 25.5% for the year. Despite a slight fourth-quarter dip in order intake and a one-off tax expense linked to the 2024 Red Lion acquisition, the company delivered record operating profit, robust cash flow, and kept net debt within its long-term leverage target, while demand improved gradually across regions, notably in Europe and North America. Strategic moves included a new organizational structure to sharpen customer focus and cross-selling, new long-term financial and strategic targets, and the agreed acquisition—now completed—of Molex’s industrial communications business, which strengthens HMS’s Industrial Network Technology offering, broadens its product portfolio and cross-selling potential, and supports its ambition for continued profitable growth through both organic development and acquisitions; the board also reinstated a dividend, proposing SEK 4.80 per share.

The most recent analyst rating on (SE:HMS) stock is a Hold with a SEK419.00 price target. To see the full list of analyst forecasts on HMS Networks AB stock, see the SE:HMS Stock Forecast page.

HMS Networks Schedules Q4 2025 Report Release and Investor Conference Call

HMS Networks has announced that it will publish its fourth quarter 2025 report on 27 January 2026, followed by a same-day conference call and webcast for analysts and media hosted by President and CEO Staffan Dahlström and CFO Joakim Nideborn. The English-language presentation, including slides and a recording made available on the company’s website, underlines HMS Networks’ continued engagement with the capital markets and provides stakeholders with structured access to management’s commentary on the company’s financial performance and outlook.

The most recent analyst rating on (SE:HMS) stock is a Hold with a SEK507.00 price target. To see the full list of analyst forecasts on HMS Networks AB stock, see the SE:HMS Stock Forecast page.

HMS Networks Finalizes Acquisition of Molex Industrial Communications Business

HMS Networks AB, a leading player in Industrial ICT with a global sales footprint and strong 2024 revenues, focuses on solutions that connect and integrate industrial equipment and systems for improved communication and control. The company has completed the acquisition of Molex’s Industrial Communications Business, comprising several strategic assets within Molex’s Industrial Solutions unit, and will consolidate the acquired operations into HMS as of January 2, 2026, strengthening its portfolio and positioning in industrial communications and potentially expanding its customer reach and technology base in this segment.

The most recent analyst rating on (SE:HMS) stock is a Hold with a SEK514.00 price target. To see the full list of analyst forecasts on HMS Networks AB stock, see the SE:HMS Stock Forecast page.

HMS Networks Achieves SBTi Validation for Climate Targets

HMS Networks AB has achieved a significant milestone by receiving validation from the Science Based Targets initiative (SBTi) for its climate targets, marking a crucial step in its sustainability journey. The validation underscores HMS’s commitment to reducing emissions in line with the Paris Agreement, with ambitious near-term and long-term goals to significantly cut greenhouse gas emissions across its operations and supply chain by 2030 and 2050, respectively. This move is part of HMS’s broader 2030 Strategy, which aims to integrate sustainability into all aspects of its business operations, thereby enhancing its industry positioning and meeting the growing demands of customers, partners, and investors for climate responsibility.

The most recent analyst rating on (SE:HMS) stock is a Hold with a SEK531.00 price target. To see the full list of analyst forecasts on HMS Networks AB stock, see the SE:HMS Stock Forecast page.

HMS Networks Acquires Molex’s Industrial Communications Business

HMS Networks AB has announced the acquisition of the Industrial Communications Business from Molex, a strategic move to enhance its Industrial Network Technology division. This acquisition, valued at USD 7 million, aims to strengthen HMS’s software and hardware offerings, expand its customer base in North America, and is expected to generate annual revenues above USD 10 million, contributing positively to the company’s EBITA.

The most recent analyst rating on (SE:HMS) stock is a Hold with a SEK531.00 price target. To see the full list of analyst forecasts on HMS Networks AB stock, see the SE:HMS Stock Forecast page.