HMS Networks AB (HMS) AI Stock Analysis

• Market Cap: kr20.52B
• Dividend Yield: N/A
• Average Volume (3M): 28.58K
• Price to Earnings (P/E): 48.3
• Beta (1Y): 1.03
• 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: kr480.00
• Price Target Upside: 19.64% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 1
• EPS Forecast (FY): 14.11
• Revenue Forecast (FY): kr3.84B

• Rating: 67 Neutral
• Price Target: kr480.00 ▲(19.64% Upside)
• Action: Upgraded Date: 01/29/26
• Date: Action: Upgraded 01/29/26

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 and Improving Margins

Sustained high gross margins (~63%) and a step-up in operating margin to ~21% reflect a differentiated product mix (embedded modules, gateways, software) and operational leverage. Durable margin strength supports reinvestment, dividend policy and buffers versus cyclical revenue swings.

Strong Cash Generation

Consistent and improving operating and free cash flow (OCF 878m; FCF 815m) provides a recurring source to fund capacity upgrades, M&A, dividends and debt reduction. Strong cash conversion reduces refinancing risk and underpins capital allocation over the medium term.

Value-Accretive Acquisitions & Integration

Successful integrations (Red Lion, PEAK, Molex) have raised margins and created cross-selling channels, adding recurring revenue and technical breadth. This expands HMS’s OEM design-ins and widens moats in industrial connectivity, improving structural growth potential.

Negative Factors

Earnings Volatility

Sharp net margin swings indicate sensitivity to project timing, mix and one-off items. Such volatility complicates planning, makes long-range margin targets less predictable, and can pressure stakeholder confidence unless margins sustain at higher levels across cycles.

Elevated Leverage vs. Earlier Years

Leverage has stepped up versus earlier years, constraining balance sheet flexibility. Although improving and within management targets, higher debt raises interest and refinancing exposure, limiting spare capacity for large opportunistic investments during downturns.

Project-driven Order Lumps and Regional Volatility

Dependence on large projects and uneven regional demand (notably North American project timing) produces lumpy orders and lower visibility. This cyclical, project-driven profile can strain working capital and make revenue and margin delivery uneven across quarters.

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 primarily makes money by selling industrial communication and connectivity products and associated software used to link industrial devices and systems. Key revenue streams include: (1) Hardware product sales: revenue from embedded communication modules and interface products that are integrated into OEM equipment, as well as gateways/protocol converters that connect different industrial networks and systems; (2) Connectivity and remote-access solutions: revenue from products used for wireless/remote connectivity and monitoring of industrial assets; (3) Software and related services: revenue from software tools and solutions that support configuration, management, diagnostics, and integration of industrial networks and connected devices; (4) OEM relationships and channel sales: a significant portion of sales is typically driven by long-term OEM design-ins (where HMS components are incorporated into customers’ products) and distribution/partner channels that resell HMS products into industrial automation markets. null

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: Positive
• 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 below the 20-day moving average (MA) of 407.63, above the 50-day MA of 400.98, and below the 200-day MA of 432.98, indicating a neutral trend. The MACD of 4.40 indicates Negative momentum. The RSI at 50.56 is Neutral, neither overbought nor oversold. The STOCH value of 41.08 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
IVSO	75 Outperform	kr12.21B	55.69	21.88%	0.87%	5.69%	4.82%
HMS	67 Neutral	kr20.52B	48.34	12.76%	―	13.97%	20.46%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
EPEN	60 Neutral	kr3.00B	24.74	9.68%	1.11%	-1.85%	-16.44%
HTRO	50 Neutral	kr6.89B	-338.28	3.38%	―	0.01%	-71.63%
MAVEN	47 Neutral	kr273.04M	-18.80	-5.81%	―	-9.79%	-144.24%
NETI.B	47 Neutral	kr763.71M	-176.87	-1.21%	―	-15.56%	-92.87%

HMS Networks AB Corporate Events

HMS Networks Calls 2026 AGM, Proposes Larger Board and New Share Plan

HMS Networks AB has called its Annual General Meeting for April 23, 2026, at its head office in Halmstad, setting out participation rules for shareholders, including share registration dates and procedures for proxies and nominee-registered holdings. The agenda includes approval of financial statements, profit allocation, discharge of liability for the board and CEO, decisions on board size, fees and auditor, as well as authorizations for new share issues and a performance-based share saving plan for all employees.

The nomination committee proposes expanding the board to seven members, raising total board remuneration to SEK 3.18 million, and re-electing six current directors while adding Henrik Elmin as a new member under the continued chairmanship of Charlotte Brogren. Öhrlings PricewaterhouseCoopers AB is recommended for re-election as auditor with Johan Palmgren as auditor in charge, underscoring continuity in governance while aligning board compensation and long-term incentive structures with the company’s strategic ambitions.

The most recent analyst rating on (SE:HMS) stock is a Hold with a SEK445.00 price target. To see the full list of analyst forecasts on HMS Networks AB stock, see the SE:HMS Stock Forecast page.

HMS Networks Nomination Committee Proposes Expanded Board and New Director

HMS Networks AB’s Nomination Committee has proposed the re-election of six current board members, including Chair Charlotte Brogren, for approval at the 2026 Annual General Meeting. The committee also proposes expanding the board from six to seven members by electing Henrik Elmin, Business Area President Industrial Technique at Atlas Copco, bringing additional expertise in industrial automation and digitalization to support HMS Networks’ strategic development.

The Nomination Committee is chaired by Johan Menckel of Investment AB Latour and includes representatives from major shareholders and the board, underscoring strong institutional involvement in HMS Networks’ governance. Other proposals from the committee will be presented in the formal notice to the AGM, signaling a continued focus on board continuity alongside targeted reinforcement of industrial and digital competence at the top level.

The most recent analyst rating on (SE:HMS) stock is a Hold with a SEK445.00 price target. To see the full list of analyst forecasts on HMS Networks AB stock, see the SE:HMS Stock Forecast page.

HMS Networks 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.