SWATCH (SWGAY) AI Stock Analysis

• Market Cap: $9.19B
• Dividend Yield: 3%
• Average Volume (3M): 7.02K
• Price to Earnings (P/E): 132.3
• Beta (1Y): 0.74
• Revenue Growth: -11.17%
• EPS Growth: -88.23%
• Country: US
• Employees: 32,477
• Sector: Consumer Cyclical
• Sector Strength: 74
• Industry: Luxury Goods
• EPS (TTM): <0.01
• Shares Outstanding: 578,720,000
• 10 Day Avg. Volume: 6,066
• 30 Day Avg. Volume: 7,018
• PEG Ratio: N/A
• Price to Book (P/B): 0.00
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 0.00
• Enterprise Value/Market Cap: 0.78
• Enterprise Value/Revenue: 1.06
• Enterprise Value/Gross Profit: 1.37
• Enterprise Value/Ebitda: 9.38
• 1Y Price Target: $8.50
• Price Target Upside: -3.30% Downside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 1

• Rating: 57 Neutral
• Price Target: $9.00 ▲(2.39% Upside)

Swatch's stock score reflects mixed financial performance and high valuation concerns. While the balance sheet is strong, declining profitability and cash flow issues weigh heavily. Technical analysis provides a neutral to slightly positive outlook, but high P/E ratio suggests overvaluation risks. Investors should be cautious of potential financial and operational challenges.

SWATCH Business Overview & Revenue Model

Company Description

The Swatch Group AG designs, manufactures, and sells finished watches, jewelry, and watch movements and components worldwide. It operates through Watches & Jewelry and Electronic Systems segments. The Watches & Jewelry segment designs, produces, and commercializes watches and jewelry. The Electronic Systems segment is involved in the design, production, and commercialization of electronic components, as well as sports timing activities. It is also involved in the provision of assembly, research and development, administration, watch case polishing, logistics and distribution, and customer services; and hard material products, microelectronics, watch cases and crowns, miniature low-frequency quartz crystals, thin wires, miniature batteries, watch dials and bracelets, watch hands, sports timing technology and equipment, precision parts, and assembly electronic components. In addition, the company engages in retail, communication, real estate project and property management, finance, reinsurance, and art center businesses. It offers its watch and jewelry products primarily under the Breguet, Harry Winston, Blancpain, Glashütte Original, Jaquet Droz, Léon Hatot, Omega, Longines, Rado, Union Glashütte, Tissot, Balmain, Certina, Mido, Hamilton, Calvin Klein, Swatch, and Flik Flak brands. The Swatch Group AG was founded in 1983 and is headquartered in Biel/Bienne, Switzerland.

How the Company Makes Money

Swatch Group makes money primarily through the design, production, and sale of watches and watch components. The company's revenue model is driven by its diverse brand portfolio, which caters to various market segments from luxury to mass-market consumers. Key revenue streams include sales of finished timepieces under brands like Omega and Longines, which are particularly popular in the luxury segment, and more affordable options like Tissot and Swatch. Additionally, Swatch Group generates income through its extensive network of retail stores and partnerships with authorized dealers worldwide. The company's earnings are significantly influenced by its strong brand recognition, heritage in Swiss watchmaking, and innovation in watch technology. Furthermore, Swatch Group also earns revenue from the manufacturing and sale of watch movements and components to other watchmakers, leveraging its expertise in watchmaking craftsmanship.

SWATCH Financial Statement Overview

Summary

Swatch shows mixed financial performance with a strong balance sheet, but faces challenges in income and cash flow. The robust balance sheet with low leverage and high equity is overshadowed by declining revenue and net income, and negative free cash flow, which impact overall financial health.

Income Statement

The income statement reveals mixed performance. Over the most recent year, Swatch experienced a significant decline in revenue, gross profit, and net income, resulting in a weakening net profit margin. However, gross profit margin remains relatively high, indicating strong cost management. The company has seen fluctuating EBIT and EBITDA margins, with a sharp decline in the latest year, reflecting potential operational challenges.

Balance Sheet

Swatch maintains a robust balance sheet with a low debt-to-equity ratio, indicating minimal financial leverage risk. The equity ratio is strong, showcasing a solid equity position relative to total assets. Return on Equity (ROE) has declined recently, reflecting lower profitability, but the overall financial health remains stable due to substantial stockholders' equity.

Cash Flow

Cash flow analysis highlights concerns, particularly with negative free cash flow in the latest year, driven by increased capital expenditures. Operating cash flow to net income ratio is relatively stable, but the free cash flow to net income ratio has weakened significantly, indicating cash flow management challenges in supporting operations and investments.

Breakdown	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	6.74B	7.89B	7.50B	7.31B	5.59B
Gross Profit	5.25B	3.77B	5.87B	5.54B	4.05B
EBITDA	764.00M	1.55B	1.51B	1.45B	502.00M
Net Income	193.00M	869.00M	807.00M	765.00M	-53.00M
Balance Sheet
Total Assets	13.99B	14.23B	13.89B	13.68B	12.90B
Cash, Cash Equivalents and Short-Term Investments	1.40B	2.05B	2.54B	2.65B	1.79B
Total Debt	22.00M	75.00M	8.00M	99.00M	91.00M
Total Liabilities	1.77B	1.97B	1.84B	2.07B	1.93B
Stockholders Equity	12.11B	12.20B	11.98B	11.54B	10.90B
Cash Flow
Free Cash Flow	-216.00M	-170.00M	337.00M	1.00B	570.00M
Operating Cash Flow	333.00M	615.00M	724.00M	1.30B	819.00M
Investing Cash Flow	-470.00M	-768.00M	-114.00M	-727.00M	-126.00M
Financing Cash Flow	-410.00M	-327.00M	-300.00M	-234.00M	-251.00M

SWATCH Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 8.79
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SWGAY, the sentiment is Neutral. The current price of 8.79 is below the 20-day moving average (MA) of 8.97, above the 50-day MA of 8.58, and below the 200-day MA of 8.88, indicating a neutral trend. The MACD of 0.09 indicates Positive momentum. The RSI at 48.73 is Neutral, neither overbought nor oversold. The STOCH value of 4.78 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for SWGAY.

SWATCH Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
TPR	74 Outperform	$23.16B	29.34	40.27%	1.29%	2.67%	1.31%
MOV	64 Neutral	$245.04M	19.21	3.67%	9.06%	-1.36%	-54.97%
SIG	63 Neutral	$3.13B	82.47	2.04%	1.62%	-3.98%	-93.50%
Sector *	62 Neutral	C$4.64B	8.13	17.93%	3.89%	2.62%	-2.19%
SWGAY	57 Neutral	$9.19B	132.30	0.49%	3.00%	-11.17%	-88.23%
FOSL	53 Neutral	$92.25M	―	-51.93%	―	-16.31%	32.30%
CPRI	51 Neutral	$2.46B	―	-142.38%	―	-16.69%	-279.61%