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Valeo SA (EU) (VLEEY)
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Valeo SA (EU) (VLEEY) AI Stock Analysis

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VLEEY

Valeo SA (EU)

(OTC:VLEEY)

Rating:77Outperform
Price Target:
$6.50
▲(18.18%Upside)
Valeo SA has a strong technical position with significant bullish momentum, supported by a reasonable valuation and attractive dividend yield. The financial performance shows recovery but is constrained by low net profit margins and high leverage, which could be a concern in the long-term.

Valeo SA (EU) (VLEEY) vs. SPDR S&P 500 ETF (SPY)

Valeo SA (EU) Business Overview & Revenue Model

Company DescriptionValeo SE designs, produces, and sells components, systems, and services for automakers in France, other European countries, Africa, North America, South America, and Asia. The company operates through four segments: Comfort & Driving Assistance Systems, Powertrain Systems, Thermal Systems, and Visibility Systems. It offers parking and driving assistance products, such as ultrasonic sensors, radars, and cameras to detect obstacles around vehicles; intuitive control products; and a range of connectivity solutions from short-range to long-range connectivity, as well as develops systems that enable the integration of applications, such as car sharing services and remote parking systems. The company also provides powertrain systems, including electric powertrain systems for electric cars; torque converters, dual dry and wet clutches, and actuators that enable the automation of transmissions to reduce fuel consumption and enhance driving comfort; and clean engines for vehicles. In addition, it designs and manufactures systems, modules, and components to optimize thermal management of vehicles and passenger comfort in the cabin, including heating ventilation and air conditioning systems. Further, the company designs and produces lighting and wiper systems for drivers in various weather conditions. Additionally, it offers original equipment spares to auto manufacturers; and replacement parts and accessories to independent aftermarket for passenger cars and commercial vehicles. The company was incorporated in 1923 and is headquartered in Paris, France.
How the Company Makes MoneyValeo SA generates revenue through the design, production, and sale of automotive components and systems to major car manufacturers worldwide. The company's revenue streams are largely derived from its four business groups, each offering specialized products that cater to the evolving needs of the automotive industry. Key revenue sources include the sale of advanced driver-assistance systems (ADAS), powertrain electrification solutions, thermal management systems, and innovative lighting and wiper systems. Significant partnerships with leading automotive manufacturers, as well as investments in research and development to drive innovation, also contribute to Valeo's earnings.

Valeo SA (EU) Earnings Call Summary

Earnings Call Date:Jul 24, 2025
(Q4-2023)
|
% Change Since: -9.54%|
Next Earnings Date:Feb 19, 2026
Earnings Call Sentiment Neutral
The earnings call highlighted successful completion of 2023 guidance, record order intake, and significant ESG progress, demonstrating strong operational performance. However, challenges remain in the Chinese market and Thermal business profitability, alongside high debt levels. The company plans strategic measures to address these issues, aiming for growth and improved margins in the coming years.
Q4-2023 Updates
Positive Updates
Successful Completion of 2023 Guidance
Achieved 100% of 2023 guidance with sales of EUR 22 billion, an EBITDA of 12%, an operating margin of 3.8%, and a free cash flow of EUR 379 million.
Record Order Intake
Set a record for order intake in 2023 at almost EUR 35 billion, with more than half related to driving assistance system technologies, interior experience software-defined vehicle, and EUR 6 billion in High Voltage electrification.
ESG Progress
Achieved a 9% decrease in CO2 emissions in absolute terms and 20% in relative terms since 2019. Continued efforts in gender diversity and safety improvements.
Improved Financial Metrics
Valeo's net attributable income reached EUR 221 million, an increase of almost 50% compared to 2022 on an adjusted basis.
Negative Updates
Challenges in China
Underperformance in China due to the need to improve customer mix and reposition the local customer portfolio, with expectations for improvement in the second half of 2024.
Thermal Business Underperformance
Current low profitability in the Thermal division, which is expected to improve gradually with the merger of Powertrain and Thermal business groups.
High Debt Levels
Financial net debt stood at EUR 4 billion, stable compared with December 2022, with a leverage ratio at 1.5x.
Company Guidance
During the earnings call for Q4 2023, Valeo's management provided detailed guidance, projecting 2024 sales between EUR 22.5 billion and EUR 23.5 billion, with EBITDA expected in the range of 12.1% to 13.1%, and an operating margin between 4.0% and 5.0%. For 2025, they anticipate sales of EUR 24.5 billion to EUR 25.5 billion, EBITDA of 13.5% to 14.5%, and an operating margin of 5.5% to 6.5%. The company aims to generate around EUR 500 million in cash for 2024, targeting a free cash flow of approximately EUR 350 million after allocating EUR 150 million to exceptional self-help measures. For 2025, a free cash flow around EUR 650 million is anticipated after similar allocations. Valeo expects to achieve a leverage ratio reduction to 1x EBITDA by 2025. Additionally, the company highlighted their strategy to drive growth through cost reduction, order intake transformation, and a reinforced cash culture, emphasizing a cautious market approach with a 3% volume discount on S&P estimates for greater comfort in achieving these targets.

Valeo SA (EU) Financial Statement Overview

Summary
Valeo SA shows steady revenue recovery and improved gross profit margin, but the net profit margin remains low. The balance sheet indicates high leverage, posing potential risks. Strong cash flow generation supports operational stability, but free cash flow growth is modest.
Income Statement
78
Positive
Valeo SA's revenue shows a recovery trend following the dip in 2020, with a 7.7% growth from 2020 to 2021 and continued growth thereafter. Gross Profit Margin improved from 13.1% in 2020 to 19% in 2024. EBIT and EBITDA margins are stable, indicating efficient cost management. Net Profit Margin, however, remains low at 0.75% in 2024, signaling room for improvement in profitability.
Balance Sheet
65
Positive
The Debt-to-Equity ratio is high at 1.89 in 2024, indicating a significant reliance on debt financing. Return on Equity improved from negative in 2020 to 4.35% in 2024, showing better utilization of equity. The Equity Ratio stands at 17.17%, suggesting a moderate level of equity financing compared to total assets.
Cash Flow
74
Positive
Operating Cash Flow has been consistently strong, reaching €2.69 billion in 2024. Free Cash Flow improved slightly from 2023 to 2024. The Operating Cash Flow to Net Income ratio is robust, highlighting strong cash generation relative to net income. However, Free Cash Flow growth remains modest.
BreakdownDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue21.49B22.04B20.04B17.26B16.44B
Gross Profit4.08B3.95B2.58B2.29B1.49B
EBITDA2.72B2.66B2.35B2.36B979.00M
Net Income162.00M221.00M230.00M175.00M-1.09B
Balance Sheet
Total Assets21.66B21.76B22.03B18.84B18.85B
Cash, Cash Equivalents and Short-Term Investments3.15B3.14B3.41B2.48B3.05B
Total Debt7.04B7.07B7.28B5.83B6.08B
Total Liabilities17.14B17.40B17.30B14.24B14.76B
Stockholders Equity3.72B3.58B3.82B3.69B3.23B
Cash Flow
Free Cash Flow463.00M461.00M319.00M249.00M287.00M
Operating Cash Flow2.69B2.46B1.81B1.60B1.76B
Investing Cash Flow-1.95B-1.91B-1.93B-1.57B-1.65B
Financing Cash Flow-524.00M-788.00M962.00M-613.00M1.14B

Valeo SA (EU) Technical Analysis

Technical Analysis Sentiment
Neutral
Last Price5.50
Price Trends
50DMA
5.41
Positive
100DMA
5.10
Positive
200DMA
4.99
Positive
Market Momentum
MACD
0.09
Positive
RSI
44.17
Neutral
STOCH
8.90
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For VLEEY, the sentiment is Neutral. The current price of 5.5 is below the 20-day moving average (MA) of 5.75, above the 50-day MA of 5.41, and above the 200-day MA of 4.99, indicating a neutral trend. The MACD of 0.09 indicates Positive momentum. The RSI at 44.17 is Neutral, neither overbought nor oversold. The STOCH value of 8.90 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for VLEEY.

Valeo SA (EU) Peers Comparison

Overall Rating
UnderperformOutperform
Sector (57)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
77
Outperform
$2.73B20.233.57%4.42%-3.62%-48.12%
76
Outperform
$14.86B11.0515.52%-2.47%-43.12%
75
Outperform
$8.76B12.4729.99%2.49%-0.98%21.64%
73
Outperform
$8.09B39.293.66%1.20%-2.12%
68
Neutral
$5.02B11.019.51%3.27%-3.12%-8.23%
66
Neutral
$6.17B15.5716.44%1.82%-1.66%-9.20%
57
Neutral
HK$25.10B4.09-2.03%5.85%-0.24%-68.05%
* Consumer Cyclical Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
VLEEY
Valeo SA (EU)
5.50
0.10
1.85%
ALV
Autoliv
111.55
14.54
14.99%
BWA
BorgWarner
36.80
3.23
9.62%
APTV
Aptiv
68.64
-4.49
-6.14%
GNTX
Gentex
26.42
-3.45
-11.55%
LEA
Lear
94.29
-21.72
-18.72%
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.Date of analysis: Jul 10, 2025