Volvo AB (VOLV.B) AI Stock Analysis

• Market Cap: kr590.20B
• Dividend Yield: 6.38%
• Average Volume (3M): 2.74M
• Price to Earnings (P/E): 15.5
• Beta (1Y): 1.34
• Revenue Growth: -9.40%
• EPS Growth: -31.77%
• Country: SE
• Employees: 91,154
• Sector: Industrials
• Sector Strength: 84
• Industry: Agricultural - Machinery
• EPS (TTM): 3.64
• Shares Outstanding: 1,588,485,200
• 10 Day Avg. Volume: 2,183,307
• 30 Day Avg. Volume: 2,735,225
• PEG Ratio: 9.84
• Price to Book (P/B): 2.81
• Price to Sales (P/S): 1.04
• P/FCF Ratio: 19.47
• 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: kr303.00
• Price Target Upside: 4.45% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 13

• Rating: 69 Neutral
• Price Target: kr299.00 ▲(3.07% Upside)

Volvo AB's overall stock score is driven by its strong financial performance and reasonable valuation. However, concerns about declining revenue growth and free cash flow impact the score. Technical indicators suggest a neutral market sentiment, further moderating the overall score.

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, including both passenger and commercial vehicles. The company earns money from Volvo Cars by selling a variety of models, including sedans, SUVs, and electrified vehicles. In the Volvo Group segment, revenue is derived from the sale of trucks, buses, and construction equipment. Additionally, Volvo earns income from parts and service sales, as well as financing solutions provided to customers. Significant partnerships with other automotive manufacturers and technology firms enhance its earnings potential, particularly in the realm of electric vehicle development and autonomous driving technologies, which are increasingly important in the evolving automotive landscape.

Volvo AB Financial Statement Overview

Summary

Volvo AB presents a solid financial foundation with strong profitability margins and efficient cash flow management. Despite a slight revenue decline, the company's profitability remains healthy. The balance sheet shows prudent leverage, although there is potential for strengthening equity financing.

Income Statement

Volvo AB demonstrates strong profitability with a gross profit margin of 26.71% and a solid net profit margin of 8.93% for the TTM (Trailing-Twelve-Months). The company has maintained healthy EBIT and EBITDA margins of 12.04% and 16.81%, respectively. However, there is a slight revenue decline observed year-over-year, which could be a concern if the trend continues.

Balance Sheet

The balance sheet is stable with a reasonable debt-to-equity ratio of 1.30, indicating a balanced leverage. Return on Equity (ROE) stands at a robust 23.57%, reflecting efficient utilization of equity. The equity ratio is 28.52%, suggesting room for improvement in equity financing to enhance stability.

Cash Flow

Volvo's cash flow performance is commendable with a free cash flow to net income ratio of 0.51, showcasing effective cash generation relative to profitability. The operating cash flow to net income ratio is 0.96, indicating strong cash conversion. However, there is a decline in free cash flow growth due to increased capital expenditures.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	500.08B	526.82B	552.76B	473.48B	372.22B	338.45B
Gross Profit	125.84B	144.05B	149.32B	111.74B	89.75B	79.13B
EBITDA	76.06B	91.35B	88.81B	68.34B	63.13B	43.30B
Net Income	38.06B	50.39B	49.83B	32.72B	32.79B	19.32B
Balance Sheet
Total Assets	677.60B	714.56B	674.07B	629.06B	515.86B	510.82B
Cash, Cash Equivalents and Short-Term Investments	61.63B	73.49B	73.61B	67.18B	50.79B	71.92B
Total Debt	265.59B	258.85B	233.52B	205.05B	151.45B	152.78B
Total Liabilities	510.59B	517.20B	493.33B	462.83B	371.74B	362.68B
Stockholders Equity	163.91B	194.05B	177.79B	162.72B	141.04B	145.29B
Cash Flow
Free Cash Flow	19.68B	28.06B	-1.99B	7.40B	11.81B	13.29B
Operating Cash Flow	42.73B	46.44B	26.68B	33.24B	33.65B	30.61B
Investing Cash Flow	-23.81B	-24.14B	-26.84B	-21.49B	-1.49B	-9.94B
Financing Cash Flow	-12.04B	-21.87B	1.82B	7.48B	-57.55B	6.44B

Volvo AB Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 290.10
• 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.B, the sentiment is Positive. The current price of 290.1 is above the 20-day moving average (MA) of 279.41, above the 50-day MA of 270.76, and above the 200-day MA of 271.56, indicating a bullish trend. The MACD of 4.84 indicates Negative momentum. The RSI at 63.81 is Neutral, neither overbought nor oversold. The STOCH value of 92.11 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for SE:VOLV.B.

Volvo AB Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
VOLV.B	69 Neutral	kr590.20B	15.50	22.62%	6.38%	-9.40%	-31.77%
Sector *	63 Neutral	$10.83B	16.63	7.96%	2.06%	2.20%	-16.67%
0NNF	―	kr173.60B	21.63	20.37%	―	―	―
0GRX	―	kr290.99B	27.33	9.27%	―	―	―
0HC0	―	kr297.67B	20.44	16.41%	―	―	―
0NWX	―	kr107.41B	19.92	9.91%	―	―	―
EPI.A	58 Neutral	kr227.04B	26.29		1.95%	3.92%	4.96%