Volvo AB (VOLV.B) AI Stock Analysis

• Market Cap: kr503.52B
• Dividend Yield: 7.48%
• Average Volume (3M): 3.39M
• Price to Earnings (P/E): 14.1
• Beta (1Y): 1.35
• 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: 1,588,953,400
• 10 Day Avg. Volume: 4,677,128
• 30 Day Avg. Volume: 3,385,933
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• 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: kr308.63
• Price Target Upside: 20.61% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 8

• Rating: 64 Neutral
• Price Target: kr265.00 ▲(3.56% Upside)

The overall stock score of 64 reflects strong financial performance and attractive valuation, offset by bearish technical indicators. The decline in revenue growth and free cash flow raises concerns about future growth, while the technical analysis suggests potential downward pressure. However, the reasonable P/E ratio and high dividend yield provide a cushion, making the stock appealing for income-focused investors.

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 demonstrates strong profitability and operational efficiency with robust margins and return on equity. However, the decline in revenue growth and free cash flow in the TTM period raises concerns about future growth prospects and liquidity. The company maintains a moderate level of leverage, which is manageable but requires monitoring.

Income Statement

Volvo AB's income statement shows a solid performance with a consistent gross profit margin around 25% and a net profit margin of approximately 7.6% in the TTM period. However, there is a notable decline in revenue growth rate by 3.35% in the TTM, indicating potential challenges in maintaining sales momentum. The EBIT and EBITDA margins remain healthy, reflecting operational efficiency, but the decline in revenue growth is a concern.

Balance Sheet

The balance sheet reflects a stable financial structure with a debt-to-equity ratio of 1.62 in the TTM, indicating moderate leverage. The return on equity is strong at 20.76%, showcasing effective use of equity capital. However, the equity ratio is not explicitly calculated, which limits a full assessment of asset financing.

Cash Flow

Cash flow analysis reveals a decrease in free cash flow growth by 16.7% in the TTM, which could impact future investments and liquidity. The operating cash flow to net income ratio is 0.14, suggesting adequate cash generation relative to net income, but the decline in free cash flow is a concern for sustaining cash reserves.

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: Negative
• Last Price: 255.90
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SE:VOLV.B, the sentiment is Negative. The current price of 255.9 is below the 20-day moving average (MA) of 268.47, below the 50-day MA of 277.82, and below the 200-day MA of 276.24, indicating a bearish trend. The MACD of -4.96 indicates Positive momentum. The RSI at 37.36 is Neutral, neither overbought nor oversold. The STOCH value of 31.53 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for SE:VOLV.B.

Volvo AB Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
HEXA.B	78 Outperform	kr301.32B	28.30	9.27%	1.39%	-1.88%	8.49%
SAND	76 Outperform	kr350.60B	23.41	16.41%	2.13%	-1.82%	12.60%
ALFA	72 Outperform	kr185.00B	23.05	20.37%	1.90%	2.66%	19.90%
SKF.B	70 Outperform	kr107.05B	19.94	9.91%	3.30%	-4.94%	-5.76%
EPI.A	66 Neutral	kr248.58B	28.79	―	1.73%	3.92%	4.96%
VOLV.B	64 Neutral	kr503.52B	14.14	20.27%	7.48%	-7.96%	-31.18%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%