SWATCH (SWGAY) AI Stock Analysis

• Market Cap: $8.34B
• Dividend Yield: 3.31%
• Average Volume (3M): 52.87K
• Price to Earnings (P/E): 37.6
• Beta (1Y): 0.70
• Revenue Growth: -12.88%
• EPS Growth: -77.31%
• Country: US
• Employees: 32,477
• Sector: Consumer Cyclical
• Sector Strength: 56
• Industry: Luxury Goods
• EPS (TTM): 0.06
• Shares Outstanding: 578,720,000
• 10 Day Avg. Volume: 0
• 30 Day Avg. Volume: 52,869
• PEG Ratio: -0.08
• Price to Book (P/B): 0.06
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 0.89
• 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: N/A
• Price Target Upside: N/A
• Rating Consensus: N/A
• Number of Analyst Covering: 0

• Rating: 52 Neutral
• Price Target: $8.50 ▲(6.65%Upside)

Swatch faces challenges in financial performance and technical indicators, which weigh on its overall stock score. While the company benefits from a strong balance sheet, declining revenue and profitability are significant concerns. The technical analysis points to bearish momentum, and the high P/E ratio suggests potential overvaluation. These factors contribute to a moderate overall stock score.

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 generates revenue primarily through the sale of watches and jewelry, leveraging its extensive brand portfolio that ranges from high-end luxury timepieces to more affordable, fashion-forward options. The company earns money by selling directly to consumers through its global network of retail stores and e-commerce platforms, as well as wholesaling to third-party retailers. Additionally, Swatch Group benefits from selling watch movements and components to other watchmakers, including those outside of its own brand portfolio. Key factors contributing to its earnings include its innovation in watch technology, strategic brand positioning, and marketing partnerships. The company's vertical integration allows it to control costs and maintain high-quality standards, further enhancing profitability.

SWATCH Financial Statement Overview

Summary

Swatch shows a mixed financial performance. The balance sheet remains strong with low leverage and high equity, but the income statement shows pressures on profitability with declining revenue and net income. The cash flow statement highlights concerns with negative free cash flow and challenges in cash flow management.

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
TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
7.31B	6.74B	7.89B	7.50B	7.31B	5.59B
	Gross Profit
4.72B	5.25B	3.77B	5.87B	5.54B	4.05B
	EBITDA
738.00M	764.00M	1.55B	1.51B	1.45B	502.00M
	Net Income
519.00M	193.00M	869.00M	807.00M	765.00M	-53.00M
Balance Sheet		Total Assets
13.99B	13.99B	14.23B	13.89B	13.68B	12.90B
	Cash, Cash Equivalents and Short-Term Investments
1.40B	1.40B	2.05B	2.54B	2.65B	1.79B
	Total Debt
22.00M	22.00M	75.00M	8.00M	99.00M	91.00M
	Total Liabilities
1.77B	1.77B	1.97B	1.84B	2.07B	1.93B
	Stockholders Equity
12.11B	12.11B	12.20B	11.98B	11.54B	10.90B
Cash Flow		Free Cash Flow
-247.00M	-216.00M	-170.00M	337.00M	1.00B	570.00M
	Operating Cash Flow
424.00M	333.00M	615.00M	724.00M	1.30B	819.00M
	Investing Cash Flow
-688.00M	-470.00M	-768.00M	-114.00M	-727.00M	-126.00M
	Financing Cash Flow
-415.00M	-410.00M	-327.00M	-300.00M	-234.00M	-251.00M

SWATCH Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 7.97
• 50DMA: Negative
• 100DMA: Negative
• 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 Negative. The current price of 7.97 is below the 20-day moving average (MA) of 8.42, below the 50-day MA of 8.41, and below the 200-day MA of 9.06, indicating a bearish trend. The MACD of -0.08 indicates Positive momentum. The RSI at 35.09 is Neutral, neither overbought nor oversold. The STOCH value of 7.78 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for SWGAY.

SWATCH Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
LNW	77 Outperform	$7.20B	22.82	46.19%	―	7.26%	54.83%
BIRK	77 Outperform	$9.79B	36.24	9.35%	―	18.55%	147.70%
RL	76 Outperform	$15.94B	22.76	29.49%	1.25%	6.75%	19.71%
SCI	76 Outperform	$11.19B	21.65	32.71%	1.63%	2.40%	4.07%
Sector *	62 Neutral	$16.17B	10.68	-5.90%	3.18%	1.65%	-24.11%
SWGAY	52 Neutral	$8.34B	37.58	1.57%	3.31%	-12.88%	-77.31%
VFC	47 Neutral	$4.56B	―	-2.39%	3.07%	-7.52%	94.28%