HMS Networks AB (HMS) AI Stock Analysis

• Market Cap: $20.69B
• Dividend Yield: 1.02%
• Average Volume (3M): 29.27K
• Price to Earnings (P/E): 56.1
• Beta (1Y): 1.06
• Revenue Growth: 10.70%
• EPS Growth: -18.64%
• Country: SE
• Employees: 1,100
• Sector: Technology
• Sector Strength: 95
• Industry: Communication Equipment
• EPS (TTM): 1.89
• Shares Outstanding: 50,318,867
• 10 Day Avg. Volume: 23,065
• 30 Day Avg. Volume: 29,266
• PEG Ratio: N/A
• Price to Book (P/B): 0.00
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 0.00
• Enterprise Value/Market Cap: 1.13
• Enterprise Value/Revenue: 7.03
• Enterprise Value/Gross Profit: 11.20
• Enterprise Value/Ebitda: 29.99
• 1Y Price Target: $498.80
• Price Target Upside: 22.74% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 1

• Rating: 60 Neutral
• Price Target: kr437.00 ▲(7.53%Upside)

HMS Networks' overall stock score is driven primarily by its strong financial performance, which demonstrates robust income growth and excellent cash flow management. This strength is offset by technical indicators showing a lack of bullish momentum and a high P/E ratio suggesting potential overvaluation. The absence of dividend yield further impacts the valuation attractiveness. The financial health and potential for growth in the industry are key strengths, while technical and valuation concerns moderate the overall 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 Networks AB generates revenue primarily through the sale of its industrial communication products and solutions. These include gateways, wireless products, and embedded network interfaces that allow industrial devices to connect with various communication networks and protocols. The company caters to system integrators, device manufacturers, and end-users in industries that require efficient and reliable data exchange. Key revenue streams include product sales, service agreements, and ongoing customer support. HMS Networks also benefits from strategic partnerships and collaborations with technology providers and industrial companies, enhancing its market reach and product offerings. Additionally, the company's focus on innovation and the growing demand for industrial IoT solutions contribute to its financial performance.

HMS Networks AB Financial Statement Overview

Summary

HMS Networks AB presents a strong financial profile with consistent revenue growth, solid profitability, and effective cash flow management. The company's income statement and cash flow metrics are robust, though the balance sheet indicates a need for careful debt management.

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.

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.

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.

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	781.00M	703.15M	860.70M	740.44M	557.37M	383.44M
Net Income	319.00M	309.68M	570.64M	507.79M	354.85M	223.49M
Balance Sheet
Total Assets	7.10B	7.50B	3.01B	2.73B	2.20B	1.83B
Cash, Cash Equivalents and Short-Term Investments	100.00M	73.93M	124.03M	144.17M	172.17M	81.54M
Total Debt	2.87B	3.16B	267.38M	298.59M	84.14M	273.62M
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

• Technical Analysis Sentiment: Positive
• Last Price: 406.40
• 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 Positive. The current price of 406.4 is below the 20-day moving average (MA) of 422.50, below the 50-day MA of 424.28, and below the 200-day MA of 430.73, indicating a neutral trend. The MACD of 0.40 indicates Negative momentum. The RSI at 55.56 is Neutral, neither overbought nor oversold. The STOCH value of 61.02 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

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
Sector *	62 Neutral	$34.53B	6.79	-11.66%	2.11%	6.09%	-7.36%
HMS	60 Neutral	$20.69B	56.08	10.83%	1.02%	10.70%	-18.64%
LTX	―	€452.36M	51.15	33.21%	0.96%	―	―
7VS	―	€1.36B	38.40	9.42%	0.82%	―	―
AR7	―	€1.37B	35.09	18.26%	1.03%	―	―
KOW	―	€286.63M	40.11	1.97%	2.33%	―	―
PIU0	―	€225.88M	15.12	15.85%	2.47%	―	―

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.