Volvo AB (VOLV.B) AI Stock Analysis

• Market Cap: kr658.27B
• Dividend Yield: 6.34%
• Average Volume (3M): 3.39M
• Price to Earnings (P/E): 19.1
• Beta (1Y): 1.39
• Revenue Growth: -7.96%
• EPS Growth: -31.18%
• Country: SE
• Employees: 91,154
• Sector: Industrials
• Sector Strength: 72
• Industry: Agricultural - Machinery
• EPS (TTM): 4.73
• Shares Outstanding: 1,589,163,000
• 10 Day Avg. Volume: 4,677,128
• 30 Day Avg. Volume: 3,385,933
• PEG Ratio: -0.55
• Price to Book (P/B): 3.37
• Price to Sales (P/S): 1.26
• P/FCF Ratio: 22.07
• 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: kr325.36
• Price Target Upside: 0.73% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 12
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 75 Outperform
• Price Target: kr363.00 ▲(12.38% Upside)

Volvo AB's stock is supported by strong technical indicators and a solid valuation, with a reasonable P/E ratio and attractive dividend yield. Financial performance is stable, though there are challenges with revenue growth and cash flow. The absence of earnings call and corporate events data limits the analysis to these factors.

Positive Factors

Recurring Aftermarket & Financial Services

Recurring aftermarket and financial services revenue provide stable, higher-margin income that smooths the cyclicality of vehicle and equipment sales. This durable revenue stream supports customer retention, spare-parts margins and funding for long-term investments such as electrification.

Sustained Profitability and Margins

Healthy gross and EBITDA margins reflect structural operational efficiency and pricing power across trucks, construction equipment and services. Sustained margins generate internal cash to fund R&D, capex and strategic shifts, helping preserve competitive position through technology transitions.

High Return on Equity

A ROE around 20.8% indicates efficient use of shareholder capital and strong profit generation. Over time, high ROE supports reinvestment and potential shareholder returns, signaling that management has historically converted equity into profitable operations effectively.

Negative Factors

Negative Revenue Growth

Material negative revenue growth undermines long-term top-line momentum and may erode scale benefits. Persistent declines reduce operating leverage, constrain reinvestment capacity for electrification and autonomy, and increase reliance on cost cuts or market share recovery strategies to restore growth.

Weak Cash Generation

Declining free cash flow and low cash conversion ratios impair the company's ability to self-fund capex, R&D and debt reduction. Structural weak cash conversion raises financing dependency, limits strategic flexibility, and increases vulnerability if margins compress or interest costs rise.

High Leverage and Modest Equity Base

A debt-to-equity ratio near 1.62 and a ~26.6% equity ratio signal significant leverage, increasing sensitivity to economic downturns and interest-rate moves. High leverage may force deleveraging priorities that crowd out growth investments or pressure dividend and capital allocation decisions over the medium term.

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 across its various business segments. The primary revenue source comes from the sale of vehicles under the Volvo brand, including passenger cars and commercial trucks. Additionally, the company earns income from its construction equipment segment, which sells machinery for various industries, including construction and mining. Aftermarket services, including parts and maintenance, contribute significantly to Volvo's revenue, providing ongoing support and service to customers. Furthermore, strategic partnerships with other firms, such as collaborations in electric vehicle technology and innovations in autonomous driving, bolster its market position and enhance revenue potential. The company also conducts financial services, offering leasing and financing solutions that provide additional revenue opportunities.

Volvo AB Financial Statement Overview

Summary

Profitability remains solid, but fundamentals are weakening: revenue turned negative in 2024 and fell further in 2025, with net margin compressing materially. The balance sheet is more leveraged (debt/equity ~1.42 in 2025), and cash-flow conversion has been volatile despite a strong free-cash-flow rebound in 2024–2025.

Income Statement

Volvo shows strong profitability for an industrial manufacturer, with healthy gross and operating margins across the period and solid returns on sales. Revenue expanded sharply in 2021–2023, but growth turned slightly negative in 2024 and declined further in 2025, alongside a meaningful drop in net margin (from ~9.6% in 2024 to ~7.2% in 2025). Overall, the earnings profile is solid, but recent margin compression and weakening top-line momentum temper the score.

Balance Sheet

The balance sheet is serviceable but leveraged. Debt relative to equity has trended higher over time, sitting around 1.42 in 2025 versus ~1.05 in 2020, which reduces flexibility in a cyclical environment. Offsetting this, shareholder returns have been strong (return on equity remained attractive, though it stepped down in 2025 versus 2023–2024), suggesting the company is still generating good profits on its capital base despite higher leverage.

Cash Flow

Cash generation is mixed. Operating cash flow is consistently positive, and free cash flow rebounded strongly in 2024–2025 (including strong growth in 2025). However, cash conversion is uneven: free cash flow was negative in 2023 and, even in stronger years, free cash flow has been well below net income (around ~0.60 in 2024–2025), indicating working-capital or investment demands can materially swing cash results.

Breakdown	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	479.18B	526.82B	552.76B	473.48B	372.22B
Gross Profit	116.87B	144.05B	149.32B	111.74B	89.75B
EBITDA	74.33B	91.35B	88.81B	67.01B	63.13B
Net Income	34.46B	50.39B	49.83B	32.72B	32.79B
Balance Sheet
Total Assets	648.59B	714.56B	674.07B	629.06B	515.86B
Cash, Cash Equivalents and Short-Term Investments	73.50B	73.49B	73.61B	67.18B	50.79B
Total Debt	253.96B	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	-1.99B	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: Positive
• Last Price: 323.00
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Negative
• 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 323 is above the 20-day moving average (MA) of 311.32, above the 50-day MA of 295.34, and above the 200-day MA of 276.46, indicating a bullish trend. The MACD of 7.60 indicates Negative momentum. The RSI at 72.59 is Negative, neither overbought nor oversold. The STOCH value of 87.35 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	75 Outperform	kr658.27B	19.10	20.27%	6.34%	-7.96%	-31.18%
ALFA	71 Outperform	kr209.56B	25.12	20.42%	1.84%	3.54%	20.94%
EPI.A	71 Outperform	kr292.25B	35.31	―	1.84%	2.00%	-0.25%
SAND	70 Outperform	kr434.52B	29.58	16.39%	1.94%	-1.77%	21.13%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%
HEXA.B	60 Neutral	kr270.59B	35.71	6.71%	1.46%	-0.93%	-34.25%
SKF.B	60 Neutral	kr116.14B	23.86	8.90%	3.19%	-4.16%	-12.95%