Snap-on (SNA) AI Stock Analysis

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Snap-on

(NYSE:SNA)

Rating:71Outperform

Price Target:

$351.00

▲(10.45%Upside)

Snap-on's overall stock score reflects strong financial health and decent valuation, offset by mixed technical indicators and a moderately positive but cautious outlook from the earnings call. The company's financial stability and cash flow management are significant strengths, while technical and segment-specific challenges weigh on the score.

Positive Factors

Earnings

Q2/25 results were better than estimates that called for net sales of $1.12 billion and EPS of $4.47.

Market Environment

The automotive repair environment remains favorable as the quarter saw mixed but improved results within its technician base.

Sales Performance

RS&I segment sales increased 3% to $468.6 million with a 60 bps increase in operating margin to 25.6%.

Negative Factors

Macroeconomic Impact

The Tools Group was impacted by macroeconomic uncertainties that saw technicians accelerating their reluctance to purchase big-ticket financed products.

Market Volatility

The more volatile backdrop is likely to further weigh on demand in the coming months.

Sales Decline

C&I sales decreased by 6.5% to $347.8 million with an operating margin decrease of 320 bps to 13.5%.

Snap-on (SNA) vs. SPDR S&P 500 ETF (SPY)

Market Cap

$16.58B

Dividend Yield2.61%

Average Volume (3M)353.46K

Price to Earnings (P/E)16.9

Beta (1Y)0.80

Revenue Growth-0.76%

EPS Growth-2.62%

CountryUS

Employees13,000

SectorIndustrials

Sector Strength87

IndustryManufacturing - Tools & Accessories

Share Statistics

EPS (TTM)4.72

Shares Outstanding52,163,372

10 Day Avg. Volume324,659

30 Day Avg. Volume353,463

Financial Highlights & Ratios

PEG RatioN/A

Price to Book (P/B)0.00

Price to Sales (P/S)0.00

P/FCF Ratio0.00

Enterprise Value/Market Cap0.99

Enterprise Value/Revenue3.43

Enterprise Value/Gross Profit6.94

Enterprise Value/Ebitda11.36

Forecast

1Y Price Target

$335.40

Price Target Upside5.54% Upside

Rating ConsensusHold

Number of Analyst Covering6

Snap-on Business Overview & Revenue Model

Company DescriptionSnap-on Incorporated manufactures and markets tools, equipment, diagnostics, and repair information and systems solutions for professional users worldwide. It operates through Commercial & Industrial Group, Snap-on Tools Group, Repair Systems & Information Group, and Financial Services segments. The company offers hand tools, including wrenches, sockets, ratchet wrenches, pliers, screwdrivers, punches and chisels, saws and cutting tools, pruning tools, torque measuring instruments, and other products; power tools, such as cordless, pneumatic, hydraulic, and corded tools; and tool storage products comprising tool chests, roll cabinets, and other products. It also provides handheld and computer-based diagnostic products, service and repair information products, diagnostic software solutions, electronic parts catalogs, business management systems and services, point-of-sale systems, integrated systems for vehicle service shops, original equipment manufacturer purchasing facilitation services, and warranty management systems and analytics. In addition, the company offers solutions for the service of vehicles and industrial equipment that include wheel alignment equipment, wheel balancers, tire changers, vehicle lifts, test lane equipment, collision repair equipment, vehicle air conditioning service equipment, brake service equipment, fluid exchange equipment, transmission troubleshooting equipment, safety testing equipment, battery chargers, and hoists, as well as after-sales support services and training programs. Further, it provides financing programs to facilitate the sales of its products and support its franchise business. The company serves the aviation and aerospace, agriculture, construction, government and military, mining, natural resources, power generation, and technical education industries, as well as vehicle dealerships and repair centers. Snap-on Incorporated was founded in 1920 and is based in Kenosha, Wisconsin.

How the Company Makes MoneySnap-on makes money through the design, manufacture, and sale of premium tools and equipment to professional users across various industries. The company's revenue streams are primarily divided into three segments: the Snap-on Tools Group, Commercial & Industrial Group, and Repair Systems & Information Group. The Snap-on Tools Group generates revenue by selling hand tools, power tools, and tool storage solutions directly to vehicle repair technicians and other professional users through a network of franchised mobile tool vans. The Commercial & Industrial Group serves a broader range of industries, providing tools, equipment, and system solutions to commercial and industrial customers. The Repair Systems & Information Group offers vehicle diagnostics, repair information systems, and software solutions, generating revenue through subscriptions and sales of diagnostic tools. Additionally, Snap-on benefits from strategic partnerships and continuous product innovation to maintain its competitive edge in the market.

Snap-on Key Performance Indicators (KPIs)

Any

Operating Margin by Segment

Operating Margin by Segment
Shows the percentage of revenue that remains after operating expenses for each segment, indicating the efficiency and profitability of different parts of the business.

Chart InsightsSnap-on's RS&I division is showing resilience with a notable margin improvement, driven by software enhancements. This contrasts with the stagnation in the Financial Services segment and challenges in the Tools Group, where tool storage demand has dropped. The company's strategic shift towards lower-priced items and AI-driven efficiencies in RS&I could mitigate some risks, but overall organic sales are declining, posing a challenge. The earnings call underscores these mixed signals, highlighting RS&I's strength amid broader market headwinds and external disruptions.

Data provided by:

Main Street Data

Snap-on Earnings Call Summary

Earnings Call Date:Jul 17, 2025

(Q2-2025)

% Change Since: 1.53%|

Next Earnings Date:Oct 16, 2025

Earnings Call Sentiment Neutral

The earnings call highlighted Snap-on's resilience amidst a turbulent macroeconomic environment, maintaining stable overall sales and achieving growth in specific segments like RSNI. However, challenges in the C&I segment, declines in operating income, and financial services earnings, coupled with the impact of foreign currency and tariffs, painted a mixed picture.

Q2-2025 Updates

Positive Updates

Stable Sales and Organic Growth in Specific Segments

Despite a challenging environment, Snap-on reported flat sales of $1,179.4 million, with RSNI segment sales increasing 2.3% organically, driven by strong performance in diagnostics and repair information products.

Strong Gross Margin Performance

Gross margin was 50.5%, only 10 basis points down from last year, offsetting unfavorable currency impacts with operational efficiencies.

Tools Group Pivot Success

The Tools Group showed resilience with a 1.6% organic sales increase, boosted by innovative product launches like the Triton diagnostic unit and a strategic pivot to faster payback items.

Encouraging Order Book in Critical Industries

Despite initial delays, orders in critical industries showed growth towards the end of the quarter, indicating a potential rebound.

Negative Updates

Decline in Operating Income and Margins

Operating income for the quarter was $259.1 million, down 7.6% from last year, with an OI margin of 22%, reflecting ongoing investments and previous one-time legal benefits.

Challenges in the Commercial and Industrial (C&I) Segment

C&I segment sales declined by 6.5%, with significant impacts from geopolitical uncertainties and project delays, particularly in Asia and Europe.

Decrease in Financial Services Operating Earnings

Operating earnings for financial services were $68.2 million, down 2.8% from last year, affected by higher provisions for credit losses and increased costs.

Impact of Foreign Currency and Tariffs

The quarter experienced a 6¢ negative impact on EPS due to unfavorable foreign currency translation and ongoing uncertainties around tariffs.

Company Guidance

In the recent Snap-on Incorporated conference call, the company reported financial results for the second quarter of 2025, highlighting several key metrics and trends. Sales were $1,179.4 million, remaining flat compared to the previous year, with an organic sales decline of 0.7% after accounting for $8.6 million in favorable foreign currency translation. Opco operating income was $259.1 million, 7.6% lower than the prior year, while the operating income (OI) margin was 22%, down by 180 basis points. The gross margin was reported at 50.5%, reflecting a slight decline of 10 basis points. Financial services saw operating earnings of $68.2 million, a decrease of 2.8% from last year. The overall OI margin for the quarter was 25.5%, compared to 27.4% in the previous year. Earnings per share (EPS) were $4.72, a decrease of 35¢ from last year, impacted by a 25¢ headwind due to higher pension amortization costs and the absence of a prior year's legal payment benefit. The automotive repair environment was described as favorable, with improvements in technician engagement and metrics such as miles driven and average vehicle age. The company noted mixed but improved results, with the Tools Group showing organic sales growth of 1.6%. The overall market environment was described as turbulent, yet Snap-on expressed confidence in its strategy and outlook for the remainder of the year.

Snap-on Financial Statement Overview

Summary

Snap-on shows strong financial health with robust profitability metrics, solid balance sheet with low leverage, and excellent cash flow management. Despite a slight revenue decline, the company maintains healthy margins and cash generation capabilities.

Income Statement

Very Positive

Snap-on demonstrated strong profitability with a consistent gross profit margin of around 49-50% over the TTM (Trailing-Twelve-Months) period. The net profit margin is robust at 21% for the TTM, showing effective cost management and operational efficiency. Despite a slight decrease in revenue from 2023 to the TTM in 2025, the company has maintained healthy EBIT and EBITDA margins, suggesting resilience in core operations.

Balance Sheet

Positive

The balance sheet for Snap-on is solid, with a low debt-to-equity ratio of 0.21 for the TTM, indicating conservative leverage. The equity ratio stands at 69.7%, highlighting strong asset backing by equity. Return on equity is impressive at 17.5% for the TTM, reflecting efficient use of shareholders' capital. This financial stability positions Snap-on well for future growth.

Cash Flow

Very Positive

Cash flow analysis reveals excellent cash management, with the operating cash flow to net income ratio at 1.10 for the TTM, indicating strong cash conversion from net income. The free cash flow growth rate is positive, and the free cash flow to net income ratio of 1.02 shows that Snap-on is generating ample free cash flow relative to its net earnings, supporting operational and strategic initiatives.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	4.77B	4.71B	5.11B	4.49B	4.25B	3.59B
Gross Profit	2.36B	2.38B	2.62B	2.18B	2.11B	1.75B
EBITDA	1.44B	1.52B	1.48B	1.35B	1.25B	991.40M
Net Income	1.00B	1.04B	1.01B	911.70M	820.50M	627.00M
Balance Sheet
Total Assets	8.20B	7.90B	7.54B	6.97B	6.76B	6.56B
Cash, Cash Equivalents and Short-Term Investments	1.46B	1.36B	1.00B	757.20M	780.00M	923.40M
Total Debt	1.20B	1.29B	1.28B	1.25B	1.23B	1.48B
Total Liabilities	2.46B	2.48B	2.45B	2.47B	2.56B	2.71B
Stockholders Equity	5.72B	5.39B	5.07B	4.48B	4.18B	3.82B
Cash Flow
Free Cash Flow	1.02B	1.13B	1.06B	591.00M	896.50M	943.00M
Operating Cash Flow	1.10B	1.22B	1.15B	675.20M	966.60M	1.01B
Investing Cash Flow	-158.70M	-204.10M	-331.80M	-206.20M	-290.40M	-187.80M
Financing Cash Flow	-722.20M	-649.80M	-572.90M	-485.00M	-818.80M	-84.30M

Snap-on Technical Analysis

Technical Analysis Sentiment

Negative

Last Price317.79

Price Trends

50DMA

319.31

Negative

100DMA

320.36

Negative

200DMA

329.92

Negative

Market Momentum

MACD

1.51

Positive

RSI

44.47

Neutral

STOCH

10.95

Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SNA, the sentiment is Negative. The current price of 317.79 is below the 20-day moving average (MA) of 323.76, below the 50-day MA of 319.31, and below the 200-day MA of 329.92, indicating a bearish trend. The MACD of 1.51 indicates Positive momentum. The RSI at 44.47 is Neutral, neither overbought nor oversold. The STOCH value of 10.95 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for SNA.

Snap-on Risk Analysis

Snap-on disclosed 26 risk factors in its most recent earnings report. Snap-on reported the most risks in the "Ability to Sell" category.

Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy

Latest Risks Added 0 New Risks

Snap-on Peers Comparison

Overall Rating

UnderperformOutperform

Sector (58)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
RBC	79 Outperform	$12.62B	50.29	8.56%	―	5.48%	16.88%
LECO	74 Outperform	$13.31B	27.12	37.35%	1.23%	0.24%	0.05%
TKR	73 Outperform	$5.12B	16.72	10.52%	1.86%	-2.01%	-9.95%
SNA	71 Outperform	$16.58B	16.94	18.18%	2.61%	-0.76%	-2.62%
KMT	71 Outperform	$1.86B	17.60	8.69%	3.28%	-2.93%	2.74%
SWK	61 Neutral	$10.37B	21.24	5.38%	4.90%	-2.71%	―
Sector *	58 Neutral	HK$13.15B	4.79	-3.05%	5.94%	3.60%	-58.57%

* Industrials Sector Average

Performance Comparison

SNA

Snap-on

317.79

53.41

20.20%

KMT

Kennametal

24.36

1.14

4.91%

LECO

Lincoln Electric Holdings

241.14

53.27

28.35%

RBC

RBC Bearings

399.80

125.53

45.77%

SWK

Stanley Black & Decker

66.98

-24.98

-27.16%

TKR

Timken Company

73.50

-6.02

-7.57%

Glossary

BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.Date of analysis: Aug 02, 2025