SKF AB (SKFRY) AI Stock Analysis

• Market Cap: $11.89B
• Dividend Yield: 3.02%
• Average Volume (3M): 440.00
• Price to Earnings (P/E): 25.2
• Beta (1Y): 1.04
• Revenue Growth: -0.39%
• EPS Growth: -11.34%
• Country: US
• Employees: 38,426
• Sector: Industrials
• Sector Strength: 72
• Industry: Manufacturing - Tools & Accessories
• EPS (TTM): 0.25
• Shares Outstanding: 426,420,260
• 10 Day Avg. Volume: 0
• 30 Day Avg. Volume: 440
• PEG Ratio: 11.41
• Price to Book (P/B): 1.59
• Price to Sales (P/S): 0.96
• P/FCF Ratio: 18.53
• Enterprise Value/Market Cap: 1.03
• Enterprise Value/Revenue: 0.16
• Enterprise Value/Gross Profit: 0.60
• Enterprise Value/Ebitda: 1.18
• 1Y Price Target: N/A
• Price Target Upside: N/A
• Rating Consensus: N/A
• Number of Analyst Covering: 0
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 67 Neutral
• Price Target: $28.00 ▲(8.70% Upside)

SKF AB's overall stock score reflects a mix of financial challenges and strategic progress. The financial performance is hindered by declining revenue growth and cash flow issues, while technical analysis shows mixed signals with a slight positive bias. Valuation is less attractive due to a high P/E ratio, but the earnings call highlights strategic initiatives and a return to organic growth, providing some optimism.

Positive Factors

Return to Organic Growth

The return to organic growth indicates a recovery in demand and effective strategic initiatives, enhancing long-term revenue potential.

Improved Operating Margin

Improved margins reflect effective cost management and operational efficiency, supporting sustainable profitability.

Strategic Initiatives Progress

Progress in strategic initiatives like the Automotive separation enhances focus and potential growth in core areas.

Negative Factors

Weak Cash Flow

Weak cash flow indicates potential liquidity challenges, affecting the company's ability to invest in growth and manage operations.

Challenging Automotive Market

Continued struggles in the Automotive segment highlight market challenges, impacting overall growth and profitability.

Declining Revenue Growth

Declining revenue growth reflects market challenges and competitive pressures, necessitating strategic adjustments for recovery.

SKF AB Business Overview & Revenue Model

Company Description

SKF AB (SKFRY) is a global leader in the design, manufacturing, and supply of bearings, seals, lubrication systems, and mechatronics, serving various industries including automotive, aerospace, industrial machinery, and energy. Established in Sweden in 1907, SKF has built a reputation for innovation and quality, offering products and services that enhance operational efficiency and reliability for its customers. The company operates through several business segments, including Industrial, Automotive, and Service, providing a comprehensive portfolio that supports machinery and equipment performance worldwide.

How the Company Makes Money

SKF generates revenue primarily through the sale of its core products, which include bearings, seals, and lubrication systems. The company also earns significant income from its service offerings, which encompass maintenance and reliability services, condition monitoring, and asset management solutions. Key revenue streams are driven by the demand from various sectors such as manufacturing, automotive, and renewable energy. Additionally, SKF engages in strategic partnerships and collaborations with original equipment manufacturers (OEMs) and distributors, enhancing its market reach and enabling co-development of innovative solutions. The company’s focus on digitalization and sustainability initiatives further contributes to its earnings by aligning with market trends and customer needs, ensuring long-term growth and profitability.

SKF AB Financial Statement Overview

Summary

SKF AB faces challenges in revenue growth and profitability, as reflected in its income statement. The balance sheet remains stable with conservative leverage, but declining equity could be a concern. Cash flow management shows weaknesses, with significant declines in free cash flow growth. The company needs strategic initiatives to enhance growth, profitability, and cash flow efficiency to sustain its financial health.

Income Statement

SKF AB's income statement shows a decline in revenue growth with a negative rate of -22.32% TTM, indicating a challenging market environment. Gross profit margin is stable at 27.28% TTM, but net profit margin has decreased to 5.16% TTM, reflecting pressure on profitability. EBIT and EBITDA margins have also declined, suggesting operational challenges. Overall, the income statement reflects a need for strategic adjustments to improve growth and profitability.

Balance Sheet

The balance sheet of SKF AB is relatively stable with a manageable debt-to-equity ratio of 0.29 TTM, indicating conservative leverage. The return on equity is moderate at 8.71% TTM, showing decent profitability from shareholders' equity. The equity ratio is healthy, suggesting a strong capital structure. However, the decline in equity over time may pose a risk if not addressed.

Cash Flow

SKF AB's cash flow statement reveals a significant decline in free cash flow growth at -37.68% TTM, indicating potential liquidity challenges. The operating cash flow to net income ratio is 0.35 TTM, suggesting a moderate conversion of income to cash. The free cash flow to net income ratio is 0.47 TTM, reflecting some efficiency in cash generation. Overall, cash flow management needs improvement to support operations and growth.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	74.22B	98.72B	103.88B	96.93B	81.73B	74.85B
Gross Profit	20.28B	27.37B	26.34B	24.47B	23.27B	16.99B
EBITDA	10.39B	14.61B	14.78B	11.54B	13.82B	10.23B
Net Income	3.93B	6.47B	6.39B	4.47B	7.33B	4.30B
Balance Sheet
Total Assets	11.37B	119.41B	111.90B	110.92B	99.63B	90.56B
Cash, Cash Equivalents and Short-Term Investments	811.16M	11.09B	13.32B	11.22B	13.66B	14.64B
Total Debt	1.66B	20.04B	21.69B	21.27B	19.21B	17.82B
Total Liabilities	5.42B	57.44B	56.95B	56.88B	54.26B	54.84B
Stockholders Equity	5.72B	59.65B	52.74B	51.93B	43.65B	34.31B
Cash Flow
Free Cash Flow	3.39B	5.11B	8.02B	428.00M	1.36B	4.89B
Operating Cash Flow	7.27B	10.79B	13.78B	5.64B	5.25B	8.27B
Investing Cash Flow	-1.57B	-5.60B	-5.87B	-5.35B	-3.15B	-3.01B
Financing Cash Flow	-4.66B	-7.57B	-4.51B	-3.40B	-3.51B	2.69B

SKF AB Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 25.76
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SKFRY, the sentiment is Positive. The current price of 25.76 is below the 20-day moving average (MA) of 26.17, below the 50-day MA of 25.88, and above the 200-day MA of 23.36, indicating a neutral trend. The MACD of 0.11 indicates Positive momentum. The RSI at 49.48 is Neutral, neither overbought nor oversold. The STOCH value of 19.91 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for SKFRY.

SKF AB Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
SNA	78 Outperform	$18.01B	18.15	17.96%	2.56%	0.24%	-1.85%
LECO	77 Outperform	$13.40B	26.09	38.11%	1.23%	3.27%	10.89%
RBC	77 Outperform	$14.26B	55.04	8.54%	―	8.27%	19.06%
TKR	76 Outperform	$5.94B	20.17	9.80%	1.63%	-1.01%	-12.13%
SWK	68 Neutral	$11.27B	25.17	4.92%	4.54%	-1.40%	―
SKFRY	67 Neutral	$11.89B	25.16	8.42%	3.02%	-0.39%	-11.34%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%