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HMS Networks AB (SE:HMS)
:HMS
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HMS Networks AB
(OTC:HMS)
Rating:64Neutral
Price Target:
kr465.00
▲(6.90%Upside)
HMS Networks AB (HMS) vs. iShares MSCI Sweden ETF (EWD)
Market Cap
$22.56B
Dividend Yield1.02%
Average Volume (3M)27.99K
Price to Earnings (P/E)68.2
Beta (1Y)1.04
Revenue Growth16.25%
EPS Growth-41.03%
CountrySE
Employees1,100
SectorTechnology
Sector Strength82
IndustryCommunication Equipment
Share Statistics
EPS (TTM)6.38
Shares Outstanding50,318,867
10 Day Avg. Volume22,378
30 Day Avg. Volume27,993
Financial Highlights & Ratios
PEG Ratio3.30
Price to Book (P/B)12.00
Price to Sales (P/S)0.00
P/FCF Ratio52.15
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price TargetN/A
Price Target UpsideN/A
Rating ConsensusN/A
Number of Analyst Covering0
HMS Networks AB Business Overview & Revenue Model
Company DescriptionHMS Networks AB is a leading provider of industrial communications technology. Based in Sweden, the company specializes in developing and manufacturing solutions that enable industrial devices to communicate and share information within industrial automation systems. HMS Networks operates in sectors such as industrial automation, automotive, energy, and building automation, offering core products like Anybus, Ixxat, and Ewon, which facilitate data exchange and connectivity across various industrial networks.
How the Company Makes MoneyHMS Networks AB generates revenue primarily through the sale of its communication products and solutions. The company's key revenue streams include the Anybus product line, which provides connectivity solutions for industrial devices, and the Ewon product line, which enables remote access and monitoring of industrial equipment. Additionally, HMS offers Ixxat solutions, focusing on communication technology for automotive and industrial applications. Revenue is also driven by strategic partnerships with global industrial equipment manufacturers and service providers, which help expand the company's market reach and customer base. HMS Networks benefits from the growing demand for industrial IoT solutions and increased automation in manufacturing, which contribute significantly to its earnings.
HMS Networks AB Earnings Call Summary
Earnings Call Date:Apr 23, 2025
(Q3-2024)
| % Change Since: 23.37%|
Next Earnings Date:Jul 11, 2025
Earnings Call Sentiment Neutral
The earnings call highlights the company's strong cost management and strategic restructuring to adapt to challenging market conditions. While there are positive developments such as a new organizational structure and the acquisition of PEAK-System, significant declines in sales and ongoing market weaknesses are concerning. The overall sentiment reflects a challenging environment with cautious optimism for future improvements.Q3-2024 Updates
Positive Updates
Cost Control and Profitability
Despite a 30% organic decline in sales, the company maintained an adjusted EBIT margin of 24.5% and achieved a strong cash flow from operations of SEK 205 million, driven by cost control measures and inventory reductions.
New Organizational Structure
The company announced a new organization focused on three divisions—Industrial Data Solutions, Industrial Network Technology, and New Industries—to improve customer focus, integrate acquisitions, and achieve full accountability for financial performance.
Acquisition of PEAK-System
HMS Networks acquired PEAK-System, a profitable German company with EUR 25 million in revenue, to strengthen its New Industries division. The acquisition is expected to provide long-term growth opportunities in the automotive and medical markets.
Negative Updates
Significant Decline in Sales and Order Intake
The company reported a 30% organic decline in net sales and an 8% decline in order intake due to weak market conditions and continued destocking by key customers, particularly in the U.S., Germany, and Japan.
High Net Debt Levels
The company's net debt is at SEK 2.6 billion, with a net debt to adjusted EBITDA ratio of 2.79, which is considered high. The acquisition of PEAK-System will increase this further.
Weak Market Conditions in Key Regions
The U.S. market was notably weaker than expected, with project business within Red Lion and Anybus embedded sales underperforming. Germany's market conditions are also challenging, with no expected improvement until 2025.
Company Guidance
During the Q3 2024 earnings call, the guidance provided revealed several key metrics indicating the company's current financial standing and expectations. HMS Networks reported a 30% decline in organic net sales, attributed to a weak market environment, especially in North America and Germany, while order intake also saw an 8% organic decrease. Despite these challenges, the company managed to reduce its organic operational expenditures by 22%, contributing to an adjusted EBIT of SEK 194 million with a margin of 24.5%. The company is actively working on reducing inventory, with significant inventory reductions achieved, and reported strong cash flow from operations at SEK 205 million. Looking forward, the management anticipates a gradual recovery in 2025, expecting the destocking impact, estimated at SEK 100 million per quarter, to stabilize. They also announced a new organizational structure, focusing on three divisions, and a recent acquisition, PEAK-System, to enhance long-term growth opportunities, specifically in automotive and medical sectors.HMS Networks AB Financial Statement Overview
Summary
HMS Networks AB shows a strong financial profile with robust income statement metrics and impressive cash flow management. The company benefits from consistent revenue growth, solid profitability, and efficient cash generation. However, attention is needed on debt management due to a moderate debt-to-equity ratio and increasing total debt.Income Statement
HMS Networks AB demonstrates robust income statement metrics with consistent revenue growth and strong profitability. The TTM revenue growth rate is approximately 9.0%, indicating solid top-line expansion. Gross profit margin stands at 62.8%, reflecting efficient production and pricing strategies. The net profit margin for TTM is 9.6%, suggesting healthy bottom-line performance. However, the EBIT margin of 16.4% shows room for improvement in operational efficiency. Overall, the company exhibits strong financial health with continuous growth and profitability.78
Positive
Balance Sheet
The balance sheet shows a mixed picture with a moderate debt-to-equity ratio of 0.85, indicating a balanced leverage position. The return on equity (ROE) is 9.4% for TTM, suggesting moderate returns to shareholders. The equity ratio stands at 47.7%, reflecting a stable financial structure. While the company's leverage is manageable, the increase in total debt over the years poses a potential risk if not carefully managed. Overall, HMS Networks maintains a stable balance sheet with attention needed on debt management.65
Positive
Cash Flow
HMS Networks exhibits strong cash flow management with a TTM operating cash flow to net income ratio of 2.26, indicating efficient cash generation from operations. Free cash flow has grown significantly, with a TTM free cash flow to net income ratio of 1.97, highlighting the company's ability to generate cash beyond operational needs. The positive trends in cash flow metrics confirm the company's capacity to fund its operations and investments internally. Overall, HMS Networks showcases excellent cash flow health, supporting its growth and operational strategies.82
Very Positive
| Breakdown | |||||
| TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 3.33B | 3.06B | 3.02B | 2.51B | 1.97B | 1.47B | Gross Profit |
| 2.09B | 1.92B | 1.97B | 1.58B | 1.23B | 908.76M | EBIT |
| 548.00M | 502.90M | 753.00M | 652.55M | 445.61M | 287.74M | EBITDA |
| 781.00M | 703.15M | 860.70M | 740.44M | 557.37M | 383.44M | Net Income Common Stockholders |
| 319.00M | 309.68M | 570.64M | 507.79M | 354.85M | 223.49M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 100.00M | 73.93M | 124.03M | 144.17M | 172.17M | 81.54M | Total Assets |
| 7.10B | 7.50B | 3.01B | 2.73B | 2.20B | 1.83B | Total Debt |
| 2.87B | 3.16B | 267.38M | 298.59M | 84.14M | 273.62M | Net Debt |
| 2.77B | 3.08B | 143.35M | 154.42M | -88.04M | 192.08M | Total Liabilities |
| 3.71B | 3.99B | 1.08B | 1.12B | 1.03B | 605.48M | Stockholders Equity |
| 3.38B | 3.50B | 1.93B | 1.61B | 1.18B | 1.20B |
| Cash Flow | Free Cash Flow | ||||
| 628.00M | 471.00M | 445.00M | 348.06M | 469.30M | 322.14M | Operating Cash Flow |
| 721.00M | 592.02M | 518.86M | 431.11M | 508.49M | 369.79M | Investing Cash Flow |
| -4.45B | -4.45B | -135.12M | -365.93M | -100.04M | -87.52M | Financing Cash Flow |
| 3.73B | 3.83B | -400.23M | -98.96M | -320.86M | -246.70M |
HMS Networks AB Technical Analysis
Negative
435.00
Price Trends
426.06
Positive
454.40
Negative
430.18
Negative
Market Momentum
0.68
Positive
45.07
Neutral
55.84
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 435 is below the 20-day moving average (MA) of 445.71, above the 50-day MA of 426.06, and above the 200-day MA of 430.18, indicating a neutral trend. The MACD of 0.68 indicates Positive momentum. The RSI at 45.07 is Neutral, neither overbought nor oversold. The STOCH value of 55.84 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
Overall Rating
UnderperformOutperform
Sector (62)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
76 Outperform | kr3.09B | 15.08 | 18.16% | 1.95% | 1.45% | 3.17% | |
75 Outperform | kr13.75B | 36.64 | 15.33% | 1.09% | -13.25% | 26.07% | |
74 Outperform | kr5.65B | 60.03 | 29.90% | 0.87% | 17.11% | 9.23% | |
66 Neutral | kr18.28B | 43.45 | 9.58% | 0.63% | 22.21% | 13.71% | |
64 Neutral | $22.56B | 68.16 | 11.31% | 1.02% | 16.25% | -41.03% | |
62 Neutral | $11.90B | 10.64 | -7.50% | 2.90% | 7.41% | -8.19% | |
60 Neutral | €3.59B | 42.81 | 1.97% | 2.72% | -9.43% | -58.34% |
* Technology Sector Average
Performance Comparison
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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.