Volvo AB (VOLV.A) AI Stock Analysis

• Market Cap: kr524.33B
• Dividend Yield: 2.82%
• Average Volume (3M): 134.65K
• Price to Earnings (P/E): 14.8
• Beta (1Y): 1.42
• Revenue Growth: -7.96%
• EPS Growth: -31.18%
• Country: SE
• Employees: 91,154
• Sector: Industrials
• Sector Strength: 72
• Industry: Agricultural - Machinery
• EPS (TTM): 3.71
• Shares Outstanding: 444,498,750
• 10 Day Avg. Volume: 166,120
• 30 Day Avg. Volume: 134,648
• PEG Ratio: 9.54
• Price to Book (P/B): 2.83
• Price to Sales (P/S): 1.04
• P/FCF Ratio: 19.58
• 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: Hold
• Number of Analyst Covering: 0
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 70 Neutral
• Price Target: kr311.00 ▲(9.74% Upside)

Volvo AB's stock score is driven by strong technical indicators and reasonable valuation. However, financial performance concerns, particularly in revenue growth and cash flow, moderate the overall score. The absence of earnings call data and corporate events limits additional insights.

Positive Factors

Operational Efficiency

Strong EBIT and EBITDA margins indicate effective cost management and operational efficiency, supporting long-term profitability.

Strategic Partnerships

Partnerships in electric and autonomous vehicles enhance product offerings, aligning with industry trends and expanding market reach.

Strong Equity Utilization

High return on equity reflects efficient capital use, indicating strong management and potential for sustained profitability.

Negative Factors

Revenue Growth Challenges

Declining revenue growth suggests difficulty in maintaining sales momentum, potentially impacting long-term market position.

Increased Leverage

Higher leverage can increase financial risk, limiting flexibility and increasing vulnerability to economic downturns.

Declining Cash Flow

Negative free cash flow growth limits reinvestment and debt repayment capacity, affecting financial stability and growth potential.

Volvo AB Business Overview & Revenue Model

Company Description

AB Volvo (publ), together with its subsidiaries, manufactures and sells trucks, buses, construction equipment, and marine and industrial engines in Europe, North America, South America, Asia, Africa, and Oceania. The company offers trucks for long-haulage, construction, mining, and distribution purposes under the Volvo, UD Trucks, Renault Trucks, Mack, Eicher, Arquus, cellcentric, and Dongfeng Trucks brands; and city and intercity buses, coaches, and bus chassis, as well as associated transport systems under the Prevost and Nova Bus brands. It also provides construction equipment, including excavators, articulated and rigid haulers, wheel loaders, road construction machines, pavers, and compactors under the brand names of Volvo, and SDLG Trucks. In addition, the company offers engines and power solutions for leisure and commercial vessels, as well as for power generation, industrial, and off-road applications under the Volvo Penta brand name. Further, it provides financing, insurance, rental, spare parts, repair, preventive maintenance, service agreement, and assistance services. The company offers its products and services through a network of dealerships and workshops. It has a strategic alliance with Isuzu Motors within commercial vehicles; a partnership with Samsung SDI Co to develop battery packs for its trucks; and an agreement with NVIDIA and Aurora to develop autonomous trucks. AB Volvo (publ) was incorporated in 1915 and is headquartered in Gothenburg, Sweden.

How the Company Makes Money

Volvo AB generates revenue through multiple streams, primarily from the sale of vehicles and equipment. In the automotive sector, the company earns money by selling its trucks, buses, and passenger cars to businesses and consumers. Additionally, Volvo offers financing solutions and maintenance services, which contribute to recurring revenue. In the construction equipment sector, sales of machinery and related parts are significant revenue drivers. The company also leverages strategic partnerships, such as collaborations with technology firms for electric and autonomous vehicles, which enhance its product offerings and market reach. Furthermore, the global demand for sustainable transport solutions and the growing trend towards electrification are key factors that positively impact Volvo's earnings.

Volvo AB Financial Statement Overview

Summary

Volvo AB demonstrates operational efficiency and profitability, with strong EBIT and EBITDA margins. However, challenges in revenue growth, declining cash flow, and increased leverage pose risks. Continued focus on cost management and cash flow improvement is crucial.

Income Statement

Volvo AB's income statement shows a mixed performance. The TTM (Trailing-Twelve-Months) data indicates a decline in revenue growth rate by 1.26%, reflecting challenges in maintaining sales momentum. Gross profit margin decreased to 25.16% from 27.34% in the previous year, indicating pressure on cost management. Net profit margin also declined to 7.61% from 9.56%, suggesting reduced profitability. However, the company maintains a healthy EBIT margin of 10.51% and EBITDA margin of 15.21%, showcasing operational efficiency.

Balance Sheet

The balance sheet reveals a stable yet leveraged position. The debt-to-equity ratio increased to 1.62, indicating higher leverage, which could pose risks if not managed properly. Return on equity stands at 20.76%, showing effective use of equity to generate profits. The equity ratio is not explicitly calculated, but the company maintains a solid equity base relative to its assets.

Cash Flow

Cash flow analysis highlights some concerns. Free cash flow growth is negative at -10.81%, indicating a decline in cash available for reinvestment or debt repayment. The operating cash flow to net income ratio is 0.14, suggesting moderate cash generation relative to net income. The free cash flow to net income ratio is 0.46, reflecting a reasonable conversion of net income to free cash flow, albeit lower than previous periods.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	493.79B	526.82B	552.76B	473.48B	372.22B	338.45B
Gross Profit	121.31B	144.05B	149.32B	111.74B	89.75B	79.13B
EBITDA	74.95B	91.35B	88.81B	67.01B	63.13B	43.30B
Net Income	35.58B	50.39B	49.83B	32.72B	32.79B	19.32B
Balance Sheet
Total Assets	644.98B	714.56B	681.81B	629.06B	515.86B	510.82B
Cash, Cash Equivalents and Short-Term Investments	57.12B	73.49B	73.61B	67.18B	50.79B	71.92B
Total Debt	250.90B	258.85B	233.52B	205.05B	151.45B	152.78B
Total Liabilities	473.11B	517.20B	501.07B	462.83B	371.74B	362.68B
Stockholders Equity	171.80B	194.05B	177.79B	162.72B	141.04B	145.29B
Cash Flow
Free Cash Flow	17.56B	28.06B	3.00B	7.40B	11.81B	13.29B
Operating Cash Flow	42.25B	46.44B	26.68B	33.24B	33.65B	30.61B
Investing Cash Flow	-26.34B	-24.14B	-26.84B	-21.49B	-1.49B	-9.94B
Financing Cash Flow	-24.50B	-21.87B	1.82B	7.48B	-57.55B	6.44B

Volvo AB Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 283.40
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SE:VOLV.A, the sentiment is Positive. The current price of 283.4 is above the 20-day moving average (MA) of 268.77, above the 50-day MA of 267.25, and above the 200-day MA of 274.75, indicating a bullish trend. The MACD of 4.54 indicates Negative momentum. The RSI at 67.70 is Neutral, neither overbought nor oversold. The STOCH value of 94.29 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for SE:VOLV.A.

Volvo AB Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
HEXA.B	78 Outperform	kr309.37B	40.83	6.71%	1.42%	-0.93%	-34.25%
ALFA	71 Outperform	kr184.01B	22.06	20.42%	1.91%	3.54%	20.94%
SAAB.B	70 Outperform	kr280.95B	54.25	13.56%	0.42%	22.49%	30.47%
SAND	70 Outperform	kr352.23B	23.82	16.39%	2.02%	-1.77%	21.13%
VOLV.A	70 Neutral	kr524.33B	14.77	20.27%	2.82%	-7.96%	-31.18%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%
SKF.B	60 Neutral	kr112.50B	23.11	8.90%	3.14%	-4.16%	-12.95%