SWATCH (SWGAY) AI Stock Analysis

• Market Cap: $11.09B
• Dividend Yield: 2.56%
• Average Volume (3M): 8.84K
• Price to Earnings (P/E): 158.8
• Beta (1Y): 0.69
• Revenue Growth: -11.17%
• EPS Growth: -88.23%
• Country: US
• Employees: 32,477
• Sector: Consumer Cyclical
• Sector Strength: 84
• Industry: Luxury Goods
• EPS (TTM): <0.01
• Shares Outstanding: 578,720,000
• 10 Day Avg. Volume: 14,977
• 30 Day Avg. Volume: 8,840
• PEG Ratio: -0.57
• Price to Book (P/B): 0.70
• Price to Sales (P/S): 1.26
• P/FCF Ratio: -39.30
• Enterprise Value/Market Cap: 0.52
• Enterprise Value/Revenue: 0.91
• Enterprise Value/Gross Profit: 1.18
• Enterprise Value/Ebitda: 10.20
• 1Y Price Target: N/A
• Price Target Upside: N/A
• Rating Consensus: Hold
• Number of Analyst Covering: 0
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 54 Neutral
• Price Target: $10.00 ▼(-6.19% Downside)

Swatch's overall stock score is primarily impacted by its mixed financial performance and concerning valuation. The strong balance sheet provides stability, but profitability and cash flow challenges need addressing. Technical analysis suggests a neutral outlook, with potential short-term weakness.

Positive Factors

Strong Balance Sheet

A strong balance sheet with low leverage provides Swatch with financial stability and flexibility, allowing it to invest in growth opportunities and weather economic downturns effectively.

Brand Diversification

Brand diversification allows Swatch to target multiple market segments, from affordable to luxury, reducing dependency on a single brand and enhancing revenue stability across economic cycles.

High Gross Profit Margin

Maintaining a high gross profit margin demonstrates effective cost control and pricing power, which supports long-term profitability and competitive positioning in the luxury goods market.

Negative Factors

Declining Revenue

A decline in revenue indicates potential challenges in market demand or competitive pressures, which could impact Swatch's ability to sustain growth and profitability in the long term.

Negative Free Cash Flow

Negative free cash flow suggests difficulties in generating sufficient cash to cover capital expenditures, which may constrain Swatch's ability to invest in future growth and innovation.

Profitability Pressures

Pressures on profitability, as seen in declining net income and margins, could hinder Swatch's capacity to reinvest in its business, affecting long-term competitive advantage and shareholder returns.

SWATCH Business Overview & Revenue Model

Company Description

SWATCH Group AG, listed under the ticker SWGAY, is a Swiss multinational company known for its design and manufacturing of watches and jewelry. The company operates primarily in the luxury and fashion watch sectors and is recognized for its innovative and stylish timepieces. SWATCH's core product offerings include a diverse range of watches under various brands, including the iconic Swatch brand, as well as luxury brands such as Breguet, Omega, and Longines. The company also engages in retail operations and has a presence in the global markets, catering to different consumer segments.

How the Company Makes Money

SWATCH generates revenue primarily through the sale of watches and jewelry across its multiple brands. The company operates a multi-tiered revenue model that includes direct sales from their retail stores, e-commerce platforms, and wholesale distribution to third-party retailers. Key revenue streams include the luxury watch segment, which comprises higher-margin products sold under brands like Omega and Longines, and the fashion watch segment, represented mainly by the Swatch brand. Additionally, significant partnerships with retailers and collaborations with fashion designers help boost sales and brand visibility. The company also benefits from a strong global brand portfolio, which enhances its market presence and allows it to attract diverse customer demographics.

SWATCH Financial Statement Overview

Summary

Swatch shows mixed financial performance. The balance sheet is strong with low leverage and high equity, but the income statement and cash flow statement indicate pressures on profitability and cash generation. The company needs to address recent declines in revenue and net income to improve financial performance.

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	6.35B	6.74B	7.89B	7.50B	7.31B	5.59B
Gross Profit	4.89B	5.25B	3.77B	5.87B	5.54B	4.05B
EBITDA	565.00M	764.00M	1.55B	1.51B	1.45B	515.00M
Net Income	60.00M	193.00M	869.00M	807.00M	765.00M	-51.00M
Balance Sheet
Total Assets	13.56B	13.99B	14.23B	13.89B	13.68B	12.90B
Cash, Cash Equivalents and Short-Term Investments	1.28B	1.40B	2.05B	2.54B	2.65B	1.79B
Total Debt	187.00M	22.00M	75.00M	8.00M	99.00M	91.00M
Total Liabilities	1.88B	1.77B	1.97B	1.84B	2.07B	1.93B
Stockholders Equity	11.59B	12.11B	12.20B	11.98B	11.54B	10.90B
Cash Flow
Free Cash Flow	-78.00M	-216.00M	-170.00M	337.00M	1.00B	570.00M
Operating Cash Flow	423.00M	333.00M	615.00M	724.00M	1.30B	819.00M
Investing Cash Flow	-350.00M	-470.00M	-768.00M	-114.00M	-727.00M	-126.00M
Financing Cash Flow	-70.00M	-410.00M	-327.00M	-300.00M	-234.00M	-251.00M

SWATCH Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 10.66
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SWGAY, the sentiment is Positive. The current price of 10.66 is above the 20-day moving average (MA) of 10.36, above the 50-day MA of 10.53, and above the 200-day MA of 9.20, indicating a bullish trend. The MACD of 0.05 indicates Negative momentum. The RSI at 57.51 is Neutral, neither overbought nor oversold. The STOCH value of 87.79 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for SWGAY.

SWATCH Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
MOV	73 Outperform	$330.27M	21.61	4.40%	6.71%	0.63%	-7.37%
TPR	69 Neutral	$25.67B	112.25	16.05%	1.16%	8.14%	-65.04%
SIG	64 Neutral	$3.39B	24.91	8.24%	1.47%	-0.40%	-68.99%
Sector *	61 Neutral	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%
FOSL	56 Neutral	$201.62M	―	-48.62%	―	-12.89%	45.32%
CPRI	56 Neutral	$3.01B	-2.57	-165.96%	―	-17.66%	-223.06%
SWGAY	54 Neutral	$11.09B	158.77	0.49%	2.56%	-11.17%	-88.23%