HMS Networks AB (HMS) AI Stock Analysis

• Market Cap: $21.85B
• Dividend Yield: 1.02%
• Average Volume (3M): 54.69K
• Price to Earnings (P/E): 58.1
• Beta (1Y): 1.07
• Revenue Growth: 10.70%
• EPS Growth: -18.64%
• Country: SE
• Employees: 1,100
• Sector: Technology
• Sector Strength: 88
• Industry: Communication Equipment
• EPS (TTM): 1.89
• Shares Outstanding: 50,318,867
• 10 Day Avg. Volume: 21,382
• 30 Day Avg. Volume: 54,688
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• Enterprise Value/Market Cap: 1.07
• Enterprise Value/Revenue: 7.03
• Enterprise Value/Gross Profit: 11.21
• Enterprise Value/Ebitda: 32.90
• 1Y Price Target: $520.38
• Price Target Upside: 23.96% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 2

• Rating: 59 Neutral
• Price Target: kr455.00 ▲(8.38% Upside)

HMS Networks AB's overall stock score is primarily influenced by its solid financial performance, despite a slight decline in revenue growth. Technical indicators suggest short-term bearish momentum, and the stock's high P/E ratio indicates it may be overvalued. The absence of a dividend yield further impacts its valuation score.

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 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 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

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

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

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.

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
EBITDA	712.00M	703.15M	860.70M	740.44M	557.37M	383.44M
Net Income	369.00M	309.68M	570.64M	507.79M	354.85M	223.49M
Balance Sheet
Total Assets	6.88B	7.50B	3.01B	2.73B	2.20B	1.83B
Cash, Cash Equivalents and Short-Term Investments	70.00M	73.93M	124.03M	144.17M	172.17M	81.54M
Total Debt	2.70B	3.16B	267.38M	298.59M	84.14M	273.62M
Total Liabilities	3.55B	3.99B	1.08B	1.12B	1.03B	605.48M
Stockholders Equity	3.32B	3.50B	1.93B	1.61B	1.18B	1.20B
Cash Flow
Free Cash Flow	650.00M	471.00M	445.00M	348.06M	469.30M	322.14M
Operating Cash Flow	770.00M	592.02M	518.86M	431.11M	508.49M	369.79M
Investing Cash Flow	-648.00M	-4.45B	-135.12M	-365.93M	-100.04M	-87.52M
Financing Cash Flow	-97.00M	3.83B	-400.23M	-98.96M	-320.86M	-246.70M

HMS Networks AB Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 419.80
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

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 419.8 is below the 20-day moving average (MA) of 446.65, below the 50-day MA of 435.78, and below the 200-day MA of 441.33, indicating a bearish trend. The MACD of -1.54 indicates Positive momentum. The RSI at 35.48 is Neutral, neither overbought nor oversold. The STOCH value of 7.60 is Positive, 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	69 Neutral	3.92B	10.95	9.42%	―	18.80%	-31.25%
EPEN	66 Neutral	3.89B	28.24	8.09%	1.03%	-9.14%	-29.28%
IVSO	66 Neutral	14.69B	58.44	24.28%	0.72%	12.46%	25.56%
HMS	59 Neutral	$21.85B	58.14	10.83%	1.02%	10.70%	-18.64%
MAVEN	55 Neutral	424.60M	-57.85	―	―	-14.52%	-124.02%
NETI.B	54 Neutral	1.60B	1,087.50	0.29%	―	-12.55%	-98.16%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%

HMS Networks AB Corporate Events

HMS Networks Reports Strong Order Intake Amidst Market Uncertainties

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

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.