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HMS Networks AB (SE:HMS)
:HMS
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HMS Networks AB (HMS) AI Stock Analysis

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SE:HMS

HMS Networks AB

(OTC:HMS)

Rating:65Neutral
Price Target:
kr456.00
▼(-1.13% Downside)
HMS Networks AB's overall stock score is primarily influenced by its solid financial performance, despite a slight decline in revenue growth and cash conversion challenges. The technical analysis suggests a stable outlook, while the high P/E ratio indicates potential overvaluation. The absence of earnings call data and corporate events limits additional insights.

HMS Networks AB (HMS) vs. iShares MSCI Sweden ETF (EWD)

HMS Networks AB Business Overview & Revenue Model

Company DescriptionHMS 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 MoneyHMS generates revenue through multiple streams primarily centered around the sale of its hardware products, software solutions, and services. The main revenue stream comes from the sale of communication gateways and devices that enable connectivity in industrial applications. Additionally, HMS earns money from licensing its software solutions, which facilitate data communication and management. The company also provides services such as technical support, consulting, and training, which contribute to its revenue. Significant partnerships with leading industrial manufacturers and technology companies enhance its market reach and drive sales growth. Furthermore, HMS benefits from ongoing trends in digitalization and IoT, as industries increasingly seek to implement advanced connectivity solutions.

HMS Networks AB Earnings Call Summary

Earnings Call Date:Jul 11, 2025
(Q3-2024)
|
% Change Since: |
Next Earnings Date:Oct 21, 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 demonstrates strong profitability with consistent gross profit margins and healthy EBIT and EBITDA margins. However, the decline in revenue growth and challenges in cash conversion slightly dampen the overall financial performance.
Income Statement
75
Positive
HMS Networks AB shows strong profitability with consistent gross profit margins above 62% and a net profit margin of 11% in the TTM. However, the revenue growth rate has declined by 6% in the TTM, indicating a potential slowdown in sales. The EBIT and EBITDA margins remain healthy, reflecting efficient operations.
Balance Sheet
70
Positive
The company maintains a moderate debt-to-equity ratio of 0.81 in the TTM, indicating manageable leverage. Return on equity is stable at 11%, suggesting effective use of equity to generate profits. The equity ratio is strong, highlighting a solid financial structure.
Cash Flow
68
Positive
HMS Networks AB has shown a positive free cash flow growth rate of 3.5% in the TTM, with a strong free cash flow to net income ratio of 0.84. However, the operating cash flow to net income ratio has decreased, indicating potential challenges in converting income to cash.
BreakdownTTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue3.33B3.06B3.02B2.51B1.97B1.47B
Gross Profit2.09B1.92B1.97B1.58B1.23B908.76M
EBITDA712.00M703.15M860.70M740.44M557.37M383.44M
Net Income369.00M309.68M570.64M507.79M354.85M223.49M
Balance Sheet
Total Assets6.88B7.50B3.01B2.73B2.20B1.83B
Cash, Cash Equivalents and Short-Term Investments70.00M73.93M124.03M144.17M172.17M81.54M
Total Debt2.70B3.16B267.38M298.59M84.14M273.62M
Total Liabilities3.55B3.99B1.08B1.12B1.03B605.48M
Stockholders Equity3.32B3.50B1.93B1.61B1.18B1.20B
Cash Flow
Free Cash Flow650.00M471.00M445.00M348.06M469.30M322.14M
Operating Cash Flow770.00M592.02M518.86M431.11M508.49M369.79M
Investing Cash Flow-648.00M-4.45B-135.12M-365.93M-100.04M-87.52M
Financing Cash Flow-97.00M3.83B-400.23M-98.96M-320.86M-246.70M

HMS Networks AB Technical Analysis

Technical Analysis Sentiment
Positive
Last Price461.20
Price Trends
50DMA
424.42
Positive
100DMA
421.46
Positive
200DMA
435.43
Positive
Market Momentum
MACD
9.77
Negative
RSI
71.45
Negative
STOCH
77.03
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SE:HMS, the sentiment is Positive. The current price of 461.2 is above the 20-day moving average (MA) of 433.62, above the 50-day MA of 424.42, and above the 200-day MA of 435.43, indicating a bullish trend. The MACD of 9.77 indicates Negative momentum. The RSI at 71.45 is Negative, neither overbought nor oversold. The STOCH value of 77.03 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for SE:HMS.

HMS Networks AB Peers Comparison

Overall Rating
UnderperformOutperform
Sector (61)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
65
Neutral
kr23.08B62.7110.83%1.02%10.70%-18.64%
61
Neutral
$35.45B7.89-10.11%1.88%8.47%-9.45%
kr4.28B30.019.07%
€426.23M13.479.42%
€44.13M1,870.00-6.07%
€1.29B57.9527.03%
€139.66M1,970.000.15%
* Technology Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
SE:HMS
HMS Networks AB
461.20
32.80
7.66%
GB:0GT8
Beijer Electronics Group AB
130.30
17.23
15.24%
DE:02H0
Hexatronic Group AB
2.08
-3.04
-59.38%
DE:96W
Maven Wireless Sweden AB
0.77
-0.27
-25.96%
DE:ICQ
INVISIO AB
28.15
7.37
35.47%
DE:NSGB
Net Insight AB Class B
0.39
-0.20
-33.90%

HMS Networks AB Corporate Events

HMS Networks Reports Strong Order Intake Amidst Market Uncertainties
Jul 11, 2025

HMS Networks AB reported a significant increase in order intake and adjusted EBIT, despite challenges such as currency fluctuations and geopolitical uncertainties impacting customer investments. The company is progressing with the integration of Red Lion and implementing organizational changes to enhance customer focus and cross-selling. The ongoing tariff negotiations and macroeconomic uncertainties pose challenges, but HMS remains cautiously optimistic about long-term growth opportunities in industrial automation and digitalization.

HMS Networks to Release Q2 2025 Report and Host Conference Call
Jul 2, 2025

HMS Networks AB announced that it will release its second quarter report for 2025 on July 11th, followed by a conference call hosted by CEO Staffan Dahlström and CFO Joakim Nideborn. This event is significant for stakeholders as it provides insights into the company’s financial performance and strategic direction. The presentation will be available in English and accessible via telephone or webcast, with materials posted on the company’s website.

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.Date of analysis: Aug 14, 2025