Volvo AB (VOLV.A) AI Stock Analysis

• Market Cap: kr691.29B
• Dividend Yield: 2.74%
• Average Volume (3M): 134.65K
• Price to Earnings (P/E): 17.5
• Beta (1Y): 1.42
• Revenue Growth: -7.96%
• EPS Growth: -31.18%
• Country: SE
• Employees: 91,154
• Sector: General
• Sector Strength: N/A
• Industry: Agricultural - Machinery
• EPS (TTM): 4.73
• Shares Outstanding: 442,288,480
• 10 Day Avg. Volume: 166,120
• 30 Day Avg. Volume: 134,648
• PEG Ratio: -0.55
• Price to Book (P/B): 3.38
• Price to Sales (P/S): 1.26
• P/FCF Ratio: 22.11
• 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: N/A
• Number of Analyst Covering: 0
• EPS Forecast (FY): 20.91
• Revenue Forecast (FY): kr482.02B

• Rating: 70 Neutral
• Price Target: kr354.00 ▲(18.95% Upside)
• Action: Downgraded Date: 11/27/25
• Date: Action: Downgraded 11/27/25

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

Strong operating margins

Sustained double‑digit EBIT and mid‑teens EBITDA margins indicate structural operational efficiency across manufacturing and services. These margins provide durable cushion against cyclical demand, support reinvestment into products and electrification, and help preserve profitability long term.

Recurring revenue streams

A diversified revenue mix including financing, maintenance and parts creates recurring cash flows and customer lock‑in. This structural shift smooths cyclicality in vehicle sales, enhances lifetime customer value, and supports stable aftermarket margins over multiple market cycles.

High return on equity

A 20.76% ROE reflects efficient use of shareholders' capital and historically strong returns on invested equity. If maintained, high ROE supports capital allocation credibility, dividend capacity, and the ability to fund strategic investments without diluting shareholders.

Negative Factors

Declining revenue trend

Nearly 8% revenue contraction signals persistent demand or market share challenges. Over 2–6 months this weak top‑line trend can erode scale economies, pressure fixed cost absorption, and constrain resources for R&D and electrification investments critical to long‑term competitiveness.

Weak free cash flow generation

Negative FCF growth and low OCF-to‑net income conversion indicate weakening cash conversion. This structurally limits capacity to repay debt, invest in capex or EV programs, and maintain shareholder distributions without relying on external financing, reducing financial flexibility.

Higher leverage

An elevated debt/equity ratio of 1.62 increases exposure to interest and refinancing risk, particularly in downturns. Higher leverage reduces strategic optionality, raises fixed financial costs, and can limit the firm's ability to fund cyclical investments or guard against prolonged weaker demand.

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	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	479.18B	526.82B	552.25B	473.48B	372.22B
Gross Profit	116.87B	144.05B	149.84B	111.74B	89.75B
EBITDA	72.70B	91.35B	89.64B	67.01B	63.08B
Net Income	34.46B	50.39B	49.83B	32.72B	32.79B
Balance Sheet
Total Assets	648.59B	714.56B	681.81B	629.06B	515.86B
Cash, Cash Equivalents and Short-Term Investments	73.50B	73.49B	73.61B	67.18B	50.79B
Total Debt	248.06B	258.85B	233.52B	205.05B	151.45B
Total Liabilities	470.11B	517.20B	493.33B	462.83B	371.74B
Stockholders Equity	178.40B	194.05B	177.79B	162.72B	141.04B
Cash Flow
Free Cash Flow	27.25B	28.06B	3.00B	7.40B	11.81B
Operating Cash Flow	45.59B	46.44B	26.68B	33.24B	33.65B
Investing Cash Flow	-27.48B	-24.14B	-26.84B	-21.49B	-1.49B
Financing Cash Flow	-25.39B	-21.87B	1.82B	7.48B	-57.55B

Volvo AB Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 297.60
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SE:VOLV.A, the sentiment is Neutral. The current price of 297.6 is below the 20-day moving average (MA) of 346.07, below the 50-day MA of 323.40, and above the 200-day MA of 285.97, indicating a neutral trend. The MACD of 5.83 indicates Positive momentum. The RSI at 43.51 is Neutral, neither overbought nor oversold. The STOCH value of 44.40 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for SE:VOLV.A.

Volvo AB Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
ALFA	73 Outperform	kr214.52B	23.27	20.42%	1.84%	3.54%	20.94%
SAAB.B	70 Outperform	kr344.54B	45.69	13.56%	0.39%	22.49%	30.47%
SAND	70 Outperform	kr475.04B	25.67	16.39%	1.94%	-1.77%	21.13%
VOLV.A	70 Neutral	kr691.29B	17.49	20.27%	2.74%	-7.96%	-31.18%
HEXA.B	60 Neutral	kr265.54B	28.54	6.71%	1.46%	-0.93%	-34.25%
SKF.B	60 Neutral	kr110.65B	28.50	8.90%	3.19%	-4.16%	-12.95%
Sector *	55 Neutral	$6.65B	3.83	-15.92%	6.20%	10.91%	7.18%

Volvo AB Corporate Events

Volvo Group Profits and Cash Flow Weaken in 2025 but Double‑Digit Margins and Strong Balance Sheet Support Dividend

Volvo Group reported a decline in full-year 2025 net sales to SEK 479.2 billion from SEK 526.8 billion, with adjusted operating income falling to SEK 51.2 billion and the adjusted operating margin easing to 10.7% as weaker earnings and lower industrial operating cash flow weighed on profitability and returns. Despite currency headwinds, divestment effects and a softer performance versus 2024, the group maintained double‑digit margins in both the fourth quarter and full year, ended 2025 with a solid SEK 63.0 billion net cash position in its Industrial Operations, and the board proposed a combined ordinary and extra dividend totaling SEK 13 per share, underscoring financial resilience and continued shareholder returns amid a more challenging market environment.

The most recent analyst rating on ($SE:VOLV.A) stock is a Buy with a SEK356.00 price target. To see the full list of analyst forecasts on Volvo AB stock, see the SE:VOLV.A Stock Forecast page.

Volvo Announces Change in Share Voting Structure

AB Volvo has announced a change in the number of votes due to the conversion of 209,660 Series A shares to Series B shares. This conversion, aligned with the company’s Articles of Association, impacts the voting structure but not the total number of shares, which remains at 2,033,452,084. This adjustment reflects Volvo’s ongoing commitment to maintaining transparency and adaptability in its corporate governance, potentially influencing shareholder dynamics and market perceptions.

The most recent analyst rating on ($SE:VOLV.A) stock is a Hold with a SEK311.00 price target. To see the full list of analyst forecasts on Volvo AB stock, see the SE:VOLV.A Stock Forecast page.