HMS Networks AB (HMS) AI Stock Analysis

• Market Cap: kr20.97B
• Dividend Yield: N/A
• Average Volume (3M): 28.58K
• Price to Earnings (P/E): 47.9
• Beta (1Y): 1.13
• Revenue Growth: 13.97%
• EPS Growth: 20.46%
• Country: SE
• Employees: 1,100
• Sector: Technology
• Sector Strength: 88
• Industry: Communication Equipment
• EPS (TTM): 3.30
• Shares Outstanding: 50,318,867
• 10 Day Avg. Volume: 37,917
• 30 Day Avg. Volume: 28,579
• PEG Ratio: -1.42
• Price to Book (P/B): 6.04
• Price to Sales (P/S): 6.92
• P/FCF Ratio: 44.92
• 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: Moderate Buy
• Number of Analyst Covering: 0
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 65 Neutral
• Price Target: kr514.00 ▲(22.97% Upside)

HMS Networks AB's strong financial performance is the primary driver of its stock score, supported by consistent revenue growth and solid profitability margins. However, technical indicators suggest bearish momentum, and the high P/E ratio indicates overvaluation, which tempers the overall score.

Positive Factors

Revenue Growth

Consistent revenue growth indicates strong demand for HMS's products and services, supporting long-term business expansion and market presence.

Cash Flow Generation

Robust cash flow generation enhances financial flexibility, enabling strategic investments and providing a buffer against economic downturns.

Profitability Margins

Healthy profitability margins reflect efficient operations and pricing power, contributing to sustainable earnings and competitive advantage.

Negative Factors

Margin Compression

Margin compression could signal rising costs or pricing pressures, potentially impacting profitability if not managed effectively.

Operating Cash Flow Coverage

Decreased operating cash flow coverage may limit the company's ability to reinvest in growth or manage debt, affecting financial stability.

Return on Equity

A declining return on equity may indicate reduced efficiency in generating profits from shareholders' equity, potentially affecting investor confidence.

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

HMS Networks AB demonstrates solid financial health with strong profitability and a stable balance sheet. The company shows consistent gross profit margins and healthy EBIT and EBITDA margins. However, a decline in revenue growth and challenges in cash conversion slightly impact the score.

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	3.43B	3.06B	3.02B	2.51B	1.97B	1.47B
Gross Profit	2.16B	1.92B	1.97B	1.58B	1.23B	908.76M
EBITDA	772.00M	703.15M	854.88M	740.44M	554.26M	345.80M
Net Income	438.00M	309.68M	570.64M	507.79M	354.85M	223.49M
Balance Sheet
Total Assets	6.85B	7.50B	3.01B	2.73B	2.20B	1.83B
Cash, Cash Equivalents and Short-Term Investments	101.00M	73.93M	124.03M	144.17M	172.17M	81.54M
Total Debt	2.48B	3.16B	267.38M	298.59M	84.14M	273.62M
Total Liabilities	3.40B	3.99B	1.08B	1.12B	1.03B	605.48M
Stockholders Equity	3.45B	3.50B	1.93B	1.61B	1.18B	1.20B
Cash Flow
Free Cash Flow	722.00M	471.00M	445.00M	348.06M	469.30M	322.14M
Operating Cash Flow	822.00M	592.02M	518.86M	431.11M	508.49M	369.79M
Investing Cash Flow	-638.00M	-4.45B	-135.12M	-365.93M	-100.04M	-87.52M
Financing Cash Flow	-146.00M	3.83B	-400.23M	-98.96M	-320.86M	-246.70M

HMS Networks AB Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 418.00
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Positive
• 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 418 is below the 20-day moving average (MA) of 451.72, below the 50-day MA of 477.18, and below the 200-day MA of 442.62, indicating a bearish trend. The MACD of -14.70 indicates Positive momentum. The RSI at 26.00 is Positive, neither overbought nor oversold. The STOCH value of 9.10 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	67 Neutral	kr4.62B	35.84	3.38%	―	0.01%	-71.63%
HMS	65 Neutral	kr20.97B	47.89	12.77%	―	13.97%	20.46%
EPEN	62 Neutral	kr3.50B	24.13	9.68%	1.15%	-1.85%	-16.44%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
IVSO	57 Neutral	kr11.94B	56.30	21.88%	0.89%	5.69%	4.82%
MAVEN	55 Neutral	€297.19M	-43.64	-5.81%	―	-9.79%	-144.24%
NETI.B	48 Neutral	kr1.28B	221.10	0.87%	―	-15.56%	-92.87%

HMS Networks AB Corporate Events

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.

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.

HMS Networks Reports Strong Q3 Growth and Sets Ambitious 2030 Targets

HMS Networks AB reported a significant increase in order intake and net sales for the third quarter, driven by strong performance in North America and China. The company has set new strategic and financial targets, including a revenue goal of SEK 7.5 billion by 2030, and plans to expand through both organic growth and acquisitions. Despite uncertainties in tariffs and geopolitics, HMS remains optimistic about future growth, focusing on product development and operational efficiency.

HMS Networks to Release Q3 2025 Report with CEO and CFO Presentation

HMS Networks AB announced that it will release its third quarter report for 2025 on October 21st, followed by a conference call hosted by CEO Staffan Dahlström and CFO Joakim Nideborn. This event provides an opportunity for press and analysts to engage with the company’s leadership and gain insights into its 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. This announcement underscores HMS Networks’ commitment to transparency and stakeholder engagement.

HMS Networks AB Appoints Nomination Committee for 2026 AGM

HMS Networks AB has appointed a Nomination Committee for its 2026 Annual General Meeting, following consultations with its four largest shareholders. This committee, representing 53% of the company’s voting shares, will propose candidates for key positions and remuneration matters for the AGM scheduled on April 23, 2026. The move is significant for ensuring shareholder representation in the company’s governance and strategic planning.

HMS Networks Sets Ambitious 2030 Strategic Targets

HMS Networks AB has announced its strategic targets for 2030, focusing on financial growth, sustainability, and operational efficiency. The company aims to expand its customer base through organic growth and acquisitions, enhance its product portfolio, and increase annual recurring revenue. The targets include achieving a net sales goal of SEK 7.5 billion and an EBITA margin of 25%. HMS also plans to improve its carbon footprint and employee engagement, aiming for a net positive carbon footprint by 2050 and an EcoVadis Gold rating. The business climate shows improvement in the USA and Germany, while other regions like the EU and Japan remain weaker. The company is addressing past challenges, such as US tariffs and delivery delays, to stabilize its operations and improve gross margins.