SWATCH (SWGAY) AI Stock Analysis

• Market Cap: $11.09B
• Dividend Yield: 2.55%
• Average Volume (3M): 8.84K
• Price to Earnings (P/E): 160.0
• 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: N/A
• Number of Analyst Covering: 0
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 54 Neutral
• Price Target: $11.50 ▲(5.70% Upside)

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 / low leverage

Swatch's low leverage and high equity provide durable financial flexibility, lowering refinancing and solvency risk. A strong balance sheet supports strategic investments, brand support and retail footprint maintenance through cyclical downturns, preserving long-term optionality.

Diversified multi-brand portfolio

A multi-tiered brand lineup spanning fashion (Swatch) to luxury (Omega, Breguet, Longines) gives structural resilience across customer segments and geographies. This diversification supports stable revenue mix, cross-selling, and pricing power over the medium term.

Relatively high gross profit margin

Sustained gross margin strength indicates durable pricing power and effective cost control in manufacturing and sourcing. High gross margins provide a buffer to absorb SG&A and investment for brand initiatives, aiding margin recovery even if revenue growth is pressured.

Negative Factors

Sharp revenue and earnings declines

Double-digit revenue decline and near-collapse in EPS point to structural demand or execution problems. Persistent top-line weakness erodes operating leverage, undermines reinvestment capacity and risks longer-term market share loss if recovery is slow or inconsistent.

Negative free cash flow

Negative free cash flow driven by increased capex weakens internal funding for dividends, M&A or brand investment. Over time this constrains capital allocation flexibility and may force reliance on external financing or asset sales, reducing strategic options.

Weakening operating margins

Declines in EBIT/EBITDA and net margins suggest rising cost pressure or operational inefficiencies. Margin compression reduces return on invested capital and ROE, making it harder to justify premium positioning and limiting ability to accelerate growth without structural improvements.

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 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: 10.88
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

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 10.88 is above the 20-day moving average (MA) of 10.79, above the 50-day MA of 10.55, and above the 200-day MA of 9.33, indicating a bullish trend. The MACD of 0.17 indicates Negative momentum. The RSI at 68.08 is Neutral, neither overbought nor oversold. The STOCH value of 70.94 is Neutral, 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	$357.40M	23.39	4.40%	6.79%	0.63%	-7.37%
TPR	69 Neutral	$26.75B	116.97	16.05%	1.16%	8.14%	-65.04%
SIG	64 Neutral	$3.87B	28.45	8.24%	1.46%	-0.40%	-68.99%
Sector *	61 Neutral	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%
CPRI	56 Neutral	$2.96B	-2.52	-165.96%	―	-17.66%	-223.06%
SWGAY	54 Neutral	$11.09B	160.02	0.49%	2.55%	-11.17%	-88.23%
FOSL	54 Neutral	$224.03M	-3.21	-48.62%	―	-12.89%	45.32%