Volvo AB (VOLV.B) AI Stock Analysis

• Market Cap: kr535.58B
• Dividend Yield: 3.05%
• Average Volume (3M): 3.23M
• Price to Earnings (P/E): 11.6
• Beta (1Y): 1.27
• Revenue Growth: -6.35%
• EPS Growth: -9.41%
• Country: SE
• Employees: 91,154
• Sector: Industrials
• Sector Strength: 91
• Industry: Agricultural - Machinery
• EPS (TTM): 4.86
• Shares Outstanding: 1,588,485,200
• 10 Day Avg. Volume: 3,168,557
• 30 Day Avg. Volume: 3,227,637
• PEG Ratio: -1.40
• Price to Book (P/B): 2.74
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 22.36
• 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: kr306.00
• Price Target Upside: 16.31% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 13

• Rating: 75 Outperform
• Price Target: kr301.00 ▲(14.41%Upside)

Volvo AB's strong financial performance and solid valuation underpin its favorable overall stock score. The financial metrics highlight robust profitability and efficient cash flow management, which are significant strengths. While technical analysis shows mixed signals, the positive MACD indicates potential upward momentum. The stock's reasonable valuation and attractive dividend yield enhance its appeal, especially to 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 primarily generates revenue through the sale of its diverse range of vehicles and equipment, including heavy-duty trucks, buses, and construction machinery. The company also earns income from providing aftermarket services such as maintenance, repairs, and spare parts, which are critical for extending the lifecycle of its products. Financial services offered by Volvo Financial Services, including leasing and insurance, provide additional revenue streams. Furthermore, Volvo AB has established significant partnerships and collaborations that enhance its product offerings and market reach, contributing positively to its earnings.

Volvo AB Financial Statement Overview

Summary

Volvo AB presents a solid financial foundation with strong profitability and efficient cash flow management. Despite a slight revenue decline, the company's profitability margins remain healthy. The balance sheet shows prudent leverage, although there is potential for strengthening equity financing. Overall, Volvo is well-positioned in the Industrial Machinery sector, with sustainable financial practices and growth potential.

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
517.43B	526.82B	552.76B	473.48B	372.22B	338.45B
	Gross Profit
138.19B	144.05B	149.32B	111.74B	89.75B	79.13B
	EBIT
62.32B	66.61B	66.78B	45.71B	43.07B	27.48B
	EBITDA
86.96B	91.35B	88.81B	68.34B	63.13B	43.30B
	Net Income Common Stockholders
46.20B	50.39B	49.83B	32.72B	32.79B	19.32B
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
90.90B	73.49B	73.61B	67.18B	50.79B	71.92B
	Total Assets
687.67B	714.56B	674.07B	629.06B	515.86B	510.82B
	Total Debt
254.39B	258.85B	233.52B	205.05B	151.45B	152.78B
	Net Debt
163.67B	185.58B	159.99B	137.96B	100.83B	81.07B
	Total Liabilities
488.49B	517.20B	493.33B	462.83B	371.74B	362.68B
	Stockholders Equity
196.07B	194.05B	177.79B	162.72B	141.04B	145.29B
Cash Flow		Free Cash Flow
23.63B	28.06B	-1.99B	7.40B	11.81B	13.29B
	Operating Cash Flow
44.38B	46.44B	26.68B	33.24B	33.65B	30.61B
	Investing Cash Flow
-22.28B	-24.14B	-26.84B	-21.49B	-1.49B	-9.94B
	Financing Cash Flow
-18.88B	-21.87B	1.82B	7.48B	-57.55B	6.44B

Volvo AB Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 263.10
• 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 263.1 is below the 20-day moving average (MA) of 269.41, below the 50-day MA of 264.24, and below the 200-day MA of 266.24, indicating a bearish trend. The MACD of -1.37 indicates Positive momentum. The RSI at 45.56 is Neutral, neither overbought nor oversold. The STOCH value of 26.18 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
VOLV.B	75 Outperform	kr535.58B	11.58	25.90%	3.05%	-6.35%	-9.41%
Sector *	66 Neutral	$4.51B	12.29	5.40%	248.53%	4.14%	-12.41%
0NNF		kr171.24B	22.32	18.80%	2.04%	―	―
0XXV		kr737.87B	23.05	27.15%	2.10%	―	―
0HC0		kr268.19B	18.22	15.81%	2.69%	―	―
0NWX		kr97.49B	15.23	11.14%	3.64%	―	―
EPI.A	80 Outperform	kr251.00B	29.43		1.75%	7.22%	-2.59%