Volvo AB (VLVLY) AI Stock Analysis

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Volvo AB

(OTC:VLVLY)

70Outperform

Volvo AB's stock score reflects its solid financial health, demonstrated by strong profitability and stable cash flows. Technical indicators suggest caution due to overbought conditions, while valuation metrics show the stock is reasonably priced. The latest earnings call provided a balanced view, acknowledging both strong performance in some areas and challenges in others.

Volvo AB (VLVLY) vs. S&P 500 (SPY)

Market Cap

$46.77B

Dividend Yield2.34%

Average Volume (3M)282.17K

Price to Earnings (P/E)9.7

Beta (1Y)1.18

Revenue Growth-4.37%

EPS Growth1.59%

CountryUS

Employees89,680

SectorIndustrials

Sector Strength61

IndustryAgricultural - Machinery

Share Statistics

EPS (TTM)2.34

Shares Outstanding1,588,485,200

10 Day Avg. Volume89,127

30 Day Avg. Volume282,169

Financial Highlights & Ratios

PEG Ratio6.14

Price to Book (P/B)N/A

Price to Sales (P/S)0.88

Price to Cash Flow (P/CF)N/A

P/FCF Ratio0.00

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price TargetN/A

Price Target UpsideN/A

Rating ConsensusN/A

Number of Analyst Covering0

Volvo AB Business Overview & Revenue Model

Company DescriptionAB Volvo (publ), together with its subsidiaries, manufactures and sells trucks, buses, construction equipment, and marine and industrial engines in Europe, North America, South America, Asia, Africa, and Oceania. The company offers trucks for long-haulage, construction, mining, and distribution purposes under the Volvo, UD Trucks, Renault Trucks, Mack, Eicher, Arquus, cellcentric, and Dongfeng Trucks brands; and city and intercity buses, coaches, and bus chassis, as well as associated transport systems under the Prevost and Nova Bus brands. It also provides construction equipment, including excavators, articulated and rigid haulers, wheel loaders, road construction machines, pavers, and compactors under the brand names of Volvo, and SDLG Trucks. In addition, the company offers engines and power solutions for leisure and commercial vessels, as well as for power generation, industrial, and off-road applications under the Volvo Penta brand name. Further, it provides financing, insurance, rental, spare parts, repair, preventive maintenance, service agreement, and assistance services. The company offers its products and services through a network of dealerships and workshops. It has a strategic alliance with Isuzu Motors within commercial vehicles; a partnership with Samsung SDI Co to develop battery packs for its trucks; and an agreement with NVIDIA and Aurora to develop autonomous trucks. AB Volvo (publ) was incorporated in 1915 and is headquartered in Gothenburg, Sweden.

How the Company Makes MoneyVolvo AB generates revenue primarily through the sale of its diverse range of vehicles and equipment. The Trucks segment, which includes brands like Volvo, Mack, and Renault, is the largest contributor to the company's revenue. The Construction Equipment segment provides machinery for construction and related industries. The Buses segment offers a variety of public transportation solutions. Volvo Penta supplies engines and power systems for marine and industrial applications. Additionally, the Financial Services segment supports sales by providing financing solutions to customers and dealers. The company also benefits from aftermarket services, including parts, maintenance, and repair services, which help ensure a steady stream of income. Significant partnerships, joint ventures, and collaborations with other automotive and tech companies further enhance Volvo's market presence and contribute to its financial performance.

Volvo AB Financial Statement Overview

Summary

Volvo AB presents a robust financial position with strong profitability, stable cash flows, and a well-managed balance sheet. Despite some fluctuations in revenue growth and free cash flow, the company demonstrates operational efficiency and financial stability.

Income Statement

Very Positive

Volvo AB demonstrates strong profitability with consistent gross profit margins and healthy net profit margins across the years. The revenue growth rate has been somewhat volatile but shows a positive trend over the long term. EBIT and EBITDA margins are robust, indicating efficient operational management.

Balance Sheet

Positive

The balance sheet reveals a moderate debt-to-equity ratio, suggesting manageable leverage. Return on equity is healthy, reflecting good profitability relative to shareholders' equity. The equity ratio shows a solid proportion of equity financing, enhancing financial stability.

Cash Flow

Positive

Volvo's cash flow statement indicates positive free cash flow growth, although it has fluctuated in recent years. The operating cash flow to net income ratio is stable, demonstrating efficient cash conversion from profits. The free cash flow to net income ratio is positive, supporting future investments and debt servicing.

Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
526.82B	552.76B	473.48B	372.22B	338.45B
	Gross Profit
144.05B	149.32B	111.74B	89.75B	79.13B
	EBIT
66.61B	67.30B	45.71B	43.07B	27.48B
	EBITDA
91.35B	89.12B	67.01B	63.08B	47.87B
	Net Income Common Stockholders
50.39B	49.83B	32.72B	32.79B	19.32B
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
85.39B	83.42B	67.18B	50.79B	71.92B
	Total Assets
714.56B	674.07B	629.06B	515.86B	510.82B
	Total Debt
263.61B	233.52B	205.05B	151.45B	152.78B
	Net Debt
178.44B	159.99B	137.96B	100.83B	81.07B
	Total Liabilities
517.20B	493.33B	462.83B	371.74B	362.68B
	Stockholders Equity
194.05B	177.79B	162.72B	141.04B	145.29B
Cash Flow		Free Cash Flow
28.06B	3.00B	7.40B	11.81B	13.29B
	Operating Cash Flow
46.44B	26.68B	33.24B	33.65B	30.61B
	Investing Cash Flow
-24.14B	-26.84B	-21.49B	-1.49B	-9.94B
	Financing Cash Flow
-21.87B	1.82B	7.48B	-57.55B	6.44B

Volvo AB Technical Analysis

Technical Analysis Sentiment

Negative

Last Price24.41

Price Trends

50DMA

28.28

Negative

100DMA

26.09

Negative

200DMA

25.18

Negative

Market Momentum

MACD

-0.01

Positive

RSI

40.05

Neutral

STOCH

2.93

Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For VLVLY, the sentiment is Negative. The current price of 24.41 is below the 20-day moving average (MA) of 27.50, below the 50-day MA of 28.28, and below the 200-day MA of 25.18, indicating a bearish trend. The MACD of -0.01 indicates Positive momentum. The RSI at 40.05 is Neutral, neither overbought nor oversold. The STOCH value of 2.93 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for VLVLY.

Volvo AB Peers Comparison

Overall Rating

UnderperformOutperform

Sector (62)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
DE	74 Outperform	$122.84B	20.06	27.91%	1.36%	-20.93%	-34.33%
VLVLY	70 Outperform	$46.77B	9.74	27.08%	2.34%	-4.37%	1.59%
PCAR	70 Outperform	$49.31B	11.88	24.93%	1.42%	-4.29%	-9.76%
CAT	69 Neutral	$143.86B	13.65	55.36%	1.84%	-3.36%	9.59%
Sector *	62 Neutral	$7.68B	13.06	3.21%	3.34%	3.62%	-14.40%
CNH	60 Neutral	$14.49B	11.74	16.66%	4.05%	-19.64%	-41.23%
AGCO	52 Neutral	$6.40B	46.40	-10.11%	1.35%	-19.08%	-136.41%

* Industrials Sector Average

Performance Comparison

VLVLY

Volvo AB

24.41

-0.32

-1.29%

AGCO

Agco

83.91

-32.01

-27.61%

CAT

Caterpillar

289.16

-71.04

-19.72%

CNH

CNH Industrial

11.19

-0.94

-7.75%

Deere

444.19

52.73

13.47%

PCAR

Paccar

88.77

-24.76

-21.81%

Volvo AB Earnings Call Summary

Earnings Call Date: Jan 29, 2025 | % Change Since: -1.49% | Next Earnings Date: Apr 23, 2025

Earnings Call Sentiment Neutral

The earnings call reflected a mixed performance with strong cash flow and order intake offset by challenges in specific segments and regions. The company's strategic initiatives and joint ventures indicate a positive outlook, but current operational and market challenges present a balanced view.

Highlights

Strong Operating Cash Flow

The company reported an all-time high operating cash flow of SEK 24.3 billion for the quarter, driven by effective working capital management.

Positive Book-to-Bill Ratio

Order momentum turned positive with a book-to-bill ratio of 106% for medium and heavy-duty trucks in Q4, indicating a strong order intake.

Volvo Penta's Record Performance

Volvo Penta concluded a very strong year with its best fourth quarter ever, showcasing a diversified product mix and strong demand for heavy-duty engines.

Joint Venture with Daimler Truck

A binding agreement was signed with Daimler Truck to establish a joint venture aimed at developing a software-defined vehicle platform for heavy-duty trucks.

High Return on Capital Employed

Return on capital employed in Industrial Operations remained strong at almost 36%.

Lowlights

Decline in Net Sales

Net sales declined by 6% to SEK 138 billion, impacted by lower volumes and negative currency effects.

Challenges in North America

The Group Trucks North America segment faced increased costs due to the storm Helen and ramp-up of the all-new VNL, negatively affecting margins.

Drop in Construction Equipment Sales

Construction Equipment sales decreased by 17% adjusted for currency, due to lower volumes and negative brand mix.

Electrification Demand Slowdown

Despite a 62% increase in orders for fully electric vehicles and machines, underlying demand in core markets slowed down.

Company Guidance

During the fourth quarter of fiscal year 2024, Volvo Group reported a net sales decline of 6% to SEK 138 billion, amid ongoing market normalization and lower volumes. The company achieved an adjusted operating income of SEK 14 billion, representing a margin of 10.1%, and generated a robust operating cash flow of SEK 24.3 billion, leading to a strong financial position with SEK 86 billion. The order intake for Group Trucks, Volvo Construction Equipment (VCE), and Volvo Penta showed momentum, turning book-to-bill positive. However, specific issues, including the impact of storm Helen in North America and ramp-up costs for the new VNL model, negatively affected the Global Trucks margin. Despite these challenges, the group maintained strong market shares, particularly in Europe, where medium and heavy-duty trucks held around 70% market share for the year. Additionally, the electrification transition continued, with a 62% increase in orders for fully electric vehicles and machines, driven by Renault Trucks and SDLG machines in China. Looking ahead, the company remains focused on maintaining price discipline, enhancing service operations, and leveraging its strong technology pipeline and industrial backbone.

Glossary

OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.

NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.

UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

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.