Snap-on (SNA) AI Stock Analysis

• Market Cap: $16.69B
• Dividend Yield: 2.68%
• Average Volume (3M): 272.04K
• Price to Earnings (P/E): 16.2
• Beta (1Y): 0.81
• Revenue Growth: -0.88%
• EPS Growth: 0.04%
• Country: US
• Employees: 13,000
• Sector: Industrials
• Sector Strength: 87
• Industry: Manufacturing - Tools & Accessories
• EPS (TTM): 4.51
• Shares Outstanding: 52,291,023
• 10 Day Avg. Volume: 295,003
• 30 Day Avg. Volume: 272,037
• PEG Ratio: 1.06
• Price to Book (P/B): 2.71
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 20.57
• Enterprise Value/Market Cap: 0.76
• Enterprise Value/Revenue: 0.64
• Enterprise Value/Gross Profit: 5.20
• Enterprise Value/Ebitda: 2.11
• 1Y Price Target: $340.00
• Price Target Upside: 9.68% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 5

• Rating: 74 Outperform
• Price Target: $359.00 ▲(15.81%Upside)

Snap-on's strong financial health and fair valuation are the primary strengths, supporting a stable outlook. However, mixed technical signals and challenges highlighted in the earnings call, such as declining organic sales and decreased demand in tool storage, temper the overall score.

Positive Factors

Aftermarket Resilience

The recession-resistant characteristics of the aftermarket business may provide a boost as new vehicle sales stall and elevated tariffs make them less affordable.

Product Innovation and Development

Snap-on is increasingly leveraging AI across all facets of its operation, driving both new product development and operational efficiencies.

Strategic Growth Initiatives

SNA maximizes its balance sheet and cash flow to invest in new growth initiatives, including new product development and strategic acquisitions, along with enhancing shareholder returns through ongoing dividend increases and share repurchases.

Negative Factors

Free Cash Flow Decrease

The firm generated FCF (Ops) of $203.4mn in Q1 down 23% YoY.

Sales Decline

Snap-on’s Q1/25 financial results included a net sales decrease of (3.5)% to $1.141 billion that included a (2.3)% decline in organic sales and a (1.2)% impact from FX.

Tools Group Performance

Snap-on’s stock sold off due to unrealistic expectations that the Tools Group would return to positive revenue growth in the quarter.

Snap-on Business Overview & Revenue Model

Company Description

Snap-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 Money

Snap-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 Financial Statement Overview

Summary

Snap-on demonstrates strong financial health with robust revenue growth, efficient operations, and solid cash flow generation. The balance sheet is strong with low leverage and a high return on equity. Minor cost pressures and stable free cash flow to net income ratio slightly temper the overall positive outlook.

Income Statement

Snap-on has demonstrated strong revenue growth with a 3.0% increase in TTM over the previous year. The gross profit margin stands at 50.97%, indicating efficient cost management. The net profit margin is solid at 21.41%, and EBIT margin is robust at 27.45%, showcasing operational efficiency. However, a slight decline in EBIT from the previous year suggests potential cost pressures.

Balance Sheet

Snap-on maintains a strong balance sheet with an equity ratio of 68.42%, indicating a high level of financial stability. The debt-to-equity ratio is low at 0.23, reflecting conservative leverage. Return on equity is impressive at 18.49%, highlighting effective use of shareholders' equity. However, a slight increase in total liabilities must be monitored.

Cash Flow

The company's operating cash flow to net income ratio is strong at 1.14, indicating healthy cash generation relative to profits. Free cash flow growth is commendable, showcasing a 2.65% increase over the previous year. However, the free cash flow to net income ratio remains stable at 1.06, indicating limited growth in free cash flow relative to net income.

Breakdown
TTM	Dec 2024	Dec 2023	Dec 2022	Mar 2022	Mar 2021
Income Statement		Total Revenue
4.77B	4.71B	5.11B	4.49B	4.25B	3.59B
	Gross Profit
2.43B	2.38B	2.62B	2.18B	2.11B	1.75B
	EBIT
1.31B	1.35B	1.31B	1.21B	1.12B	880.50M
	EBITDA
1.49B	1.52B	1.48B	1.35B	1.25B	991.40M
	Net Income Common Stockholders
1.02B	1.04B	1.01B	911.70M	820.50M	627.00M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
1.43B	1.36B	1.00B	757.20M	780.00M	923.40M
	Total Assets
8.07B	7.90B	7.54B	6.97B	6.76B	6.56B
	Total Debt
1.27B	1.29B	1.28B	1.25B	1.23B	1.48B
	Net Debt
-161.00M	-67.70M	279.80M	488.50M	454.50M	561.20M
	Total Liabilities
2.52B	2.48B	2.45B	2.47B	2.56B	2.71B
	Stockholders Equity
5.52B	5.39B	5.07B	4.48B	4.18B	3.82B
Cash Flow		Free Cash Flow
1.08B	1.13B	1.06B	591.00M	896.50M	943.00M
	Operating Cash Flow
1.17B	1.22B	1.15B	675.20M	966.60M	1.01B
	Investing Cash Flow
-172.90M	-204.10M	-331.80M	-206.20M	-290.40M	-187.80M
	Financing Cash Flow
-679.20M	-649.80M	-572.90M	-485.00M	-818.80M	-84.30M

Snap-on Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 310.00
• 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 SNA, the sentiment is Negative. The current price of 310 is below the 20-day moving average (MA) of 321.45, below the 50-day MA of 317.79, and below the 200-day MA of 323.13, indicating a bearish trend. The MACD of -0.66 indicates Positive momentum. The RSI at 38.64 is Neutral, neither overbought nor oversold. The STOCH value of 43.46 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for SNA.

Snap-on Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
LECO	77 Outperform	$11.24B	24.84	34.83%	1.49%	-2.29%	-14.49%
RBC	77 Outperform	$11.70B	48.24	8.51%	―	4.87%	19.66%
SNA	74 Outperform	$16.69B	16.22	19.15%	2.68%	-0.88%	0.04%
TKR	72 Outperform	$5.04B	15.25	11.85%	1.94%	-3.69%	-11.76%
KMT	71 Outperform	$1.70B	15.82	8.69%	3.65%	-2.93%	2.74%
SWK	66 Neutral	$10.10B	27.72	4.03%	5.03%	-3.04%	―
Sector *	66 Neutral	$4.47B	12.22	5.40%	3.65%	4.14%	-12.00%