Volvo AB (VOLV.B) AI Stock Analysis

• Market Cap: kr682.27B
• Dividend Yield: 6.34%
• Average Volume (3M): 3.39M
• Price to Earnings (P/E): 17.5
• Beta (1Y): 1.40
• 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: 1,591,163,600
• 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: kr348.18
• Price Target Upside: 3.78% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 11
• EPS Forecast (FY): 20.95
• Revenue Forecast (FY): kr482.66B

• Rating: 75 Outperform
• Price Target: kr363.00 ▲(8.20% Upside)
• Action: Reiterated Date: 11/27/25
• Date: Action: Reiterated 11/27/25

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

Volvo AB demonstrates strong profitability and efficient equity utilization, but faces challenges with revenue growth and cash flow generation. The high leverage poses a risk, but the company manages to maintain healthy margins. Continued focus on improving cash flow and reducing debt could enhance financial stability.

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 a challenging market environment. However, the company maintains solid profitability with a gross profit margin of 25.16% and a net profit margin of 7.61%. Despite the revenue decline, the EBIT and EBITDA margins remain healthy at 10.51% and 15.21%, respectively, indicating effective cost management.

Balance Sheet

The balance sheet reveals a high debt-to-equity ratio of 1.62 in the TTM, suggesting significant leverage. However, the return on equity remains strong at 20.76%, indicating efficient use of equity to generate profits. The equity ratio stands at 26.64%, reflecting a moderate level of financial stability.

Cash Flow

Cash flow analysis shows a decline in free cash flow growth by -10.81% in the TTM, indicating potential liquidity challenges. The operating cash flow to net income ratio is 0.14, and the free cash flow to net income ratio is 0.46, suggesting that cash generation relative to net income is moderate. This could impact the company's ability to fund operations and investments without relying on external financing.

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: Neutral
• Last Price: 335.50
• 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.B, the sentiment is Neutral. The current price of 335.5 is below the 20-day moving average (MA) of 345.98, above the 50-day MA of 324.40, and above the 200-day MA of 286.16, indicating a neutral trend. The MACD of 5.15 indicates Positive momentum. The RSI at 51.37 is Neutral, neither overbought nor oversold. The STOCH value of 30.85 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral 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	kr682.27B	17.46	20.27%	6.34%	-7.96%	-31.18%
ALFA	73 Outperform	kr215.76B	23.27	20.42%	1.84%	3.54%	20.94%
EPI.A	71 Outperform	kr287.16B	29.50	―	1.84%	2.00%	-0.25%
SAND	70 Outperform	kr469.89B	25.67	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	kr267.15B	43.82	6.71%	1.46%	-0.93%	-34.25%
SKF.B	60 Neutral	kr108.57B	28.50	8.90%	3.19%	-4.16%	-12.95%