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Volvo AB Class B (VLVLY)
OTHER OTC:VLVLY
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Volvo AB
(OTC:VLVLY)
Rating:73Outperform
Price Target:
$34.00
â–²(15.96% Upside)
Positive Factors
Electrification Growth
Volvo's significant increase in electric vehicle orders indicates a strong position in the growing EV market, aligning with global sustainability trends and providing a durable competitive advantage.
Construction Equipment Growth
The growth in construction equipment deliveries suggests expanding market demand and operational efficiency, supporting long-term revenue stability and diversification beyond traditional vehicle sales.
Strategic Partnerships
The partnership with ECARX for the XC70 hybrid SUV enhances Volvo's technological capabilities and market appeal, reinforcing its innovation-driven strategy and competitive edge in the automotive industry.
Negative Factors
Declining Truck Volumes
The decline in truck volumes, particularly in key markets, poses a risk to revenue growth and market share, necessitating strategic adjustments to address demand fluctuations and competitive pressures.
Negative Impact of Zero-Emission Transition
The financial impact of transitioning to zero-emission vehicles highlights the challenges and costs associated with industry shifts, potentially affecting profitability and requiring careful management of transition strategies.
Increasing Leverage
The high leverage level indicates potential financial risk, limiting flexibility and increasing vulnerability to economic downturns, which could impact long-term financial health and investment capacity.
Volvo AB (VLVLY) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$59.95B
Dividend Yield6.33%
Average Volume (3M)8.34K
Price to Earnings (P/E)16.4
Beta (1Y)1.01
Revenue Growth-7.08%
EPS Growth-30.36%
CountryUS
Employees91,154
SectorIndustrials
Sector Strength70
IndustryAgricultural - Machinery
Share Statistics
EPS (TTM)0.37
Shares Outstanding1,588,673,100
10 Day Avg. Volume0
30 Day Avg. Volume8,337
Financial Highlights & Ratios
PEG Ratio9.43
Price to Book (P/B)2.80
Price to Sales (P/S)1.03
P/FCF Ratio19.36
Enterprise Value/Market Cap1.31
Enterprise Value/Revenue0.16
Enterprise Value/Gross Profit0.62
Enterprise Value/Ebitda1.03
Forecast
1Y Price Target
$34.00Price Target Upside15.96% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering1
Volvo AB Business Overview & Revenue Model
Company DescriptionVolvo AB is a Swedish multinational manufacturing company primarily known for its production of trucks, buses, construction equipment, and marine and aerospace components. Founded in 1927, Volvo operates through several business segments, including Volvo Trucks, Volvo Buses, Volvo Construction Equipment, and Volvo Penta, providing innovative and sustainable transport solutions. The company is committed to safety, quality, and environmental care, positioning itself as a leader in the automotive and transport industries.
How the Company Makes MoneyVolvo AB generates revenue through multiple streams, primarily from the sale of vehicles and equipment across its various segments. The largest portion of its revenue comes from the sale of trucks and buses, catering to both commercial and public transportation needs. Additionally, Volvo earns income from its construction equipment and marine products through direct sales and leasing agreements. The company also benefits from after-sales services, including maintenance, parts sales, and financing solutions, which provide a steady revenue stream. Strategic partnerships with other companies and participation in joint ventures enhance its market reach and innovation capabilities, further contributing to its earnings. Moreover, Volvo's commitment to sustainability and electrification is expected to open new revenue opportunities in the growing electric vehicle market.
Volvo AB Earnings Call Summary
Earnings Call Date:Jul 17, 2025
(Q2-2025)
| % Change Since: |
Next Earnings Date:Oct 17, 2025
Earnings Call Sentiment Neutral
The earnings call reflected a stable operating margin and achievements in electrification and construction equipment growth. However, challenges in truck volumes, particularly in North America, and negative impacts from the slower transition to zero-emission vehicles weigh on results. Despite these challenges, the company maintains a strong financial position and continues to push forward with innovation and market share gains.Q2-2025 Updates
Positive Updates
Stable Operating Margin
The Volvo Group reported a solid adjusted operating margin of 11% for the second quarter of 2025.
Strong Cash Flow and Net Cash Position
Cash flow amounted to SEK 2.9 billion, resulting in a net cash position of SEK 43.1 billion in industrial operations.
Growth in Electrification
Orders for fully electric vehicles increased by 59%, with notable increases in SDLG machines in China and a 53% increase in truck orders.
Construction Equipment Growth
Deliveries of Construction Equipment increased by 11%, with SDLG increasing by 22%.
Record Financial Services Volume
Financial Services reached a record new business volume of SEK 27.8 billion, a 9% year-over-year increase adjusted for currency.
Mack Trucks Market Share Gains
In North America, Mack Trucks improved to a 7.2% market share year-to-date through May.
Negative Updates
Decline in Truck Volumes
Net sales declined to SEK 123 billion due to a 12% year-over-year drop in truck volumes, with a 10% decline in truck deliveries.
Negative Impact of Zero-Emission Transition
Impairment of battery-electric assets and renegotiated battery volume commitments led to a SEK 4.5 billion negative effect on operating income.
North American Market Challenges
North American truck sales decreased by 10% FX adjusted, with a book-to-bill ratio of 63%, reflecting softer order levels.
Negative Currency Impact
FX had a negative SEK 2.3 billion impact on the quarter's earnings, driven by the strengthening of the SEK.
Company Guidance
In the second quarter of fiscal year 2025, Volvo Group reported a solid adjusted operating margin of 11%, with an adjusted operating income of SEK 13.5 billion. Despite a 12% year-over-year decline in net sales to SEK 123 billion, the group maintained strong resilience with a net cash position of SEK 43.1 billion in industrial operations and a return on capital employed at 25.7%. Truck deliveries decreased by 10%, impacting North and South America significantly, while European heavy-duty truck deliveries remained stable. Construction equipment deliveries rose by 11%, with SDLG machines in China experiencing a 22% increase. The group faced challenges due to slower-than-expected societal transition to zero-emission solutions, leading to SEK 4.5 billion in negative impacts from battery-electric asset impairments and renegotiated battery commitments. Conversely, the formation of Coretura, a joint venture with Daimler, positively affected income by close to SEK 1 billion. Despite uncertainties, the group demonstrated strong market shares, achieving nearly 60% in the European medium- and heavy-duty truck market and significant advances in electrification efforts, with fully electric vehicle orders increasing by 59%.Volvo AB Financial Statement Overview
Summary
Volvo AB shows a robust financial profile with strong profitability, efficient operations, and a stable balance sheet. While there is a slight decline in revenue and Free Cash Flow, the company's financial health remains strong, supported by solid profit margins and effective cost management.Income Statement
Volvo AB demonstrates strong income statement metrics, showcasing robust profitability and growth. The TTM (Trailing-Twelve-Months) Gross Profit Margin is approximately 26.71%, and the Net Profit Margin is around 8.93%, indicating efficient cost management and profitability. Although the TTM revenue has decreased slightly compared to the previous year, the company has maintained healthy EBIT and EBITDA margins of approximately 12.05% and 16.69% respectively, reflecting solid operational performance. The consistency in margins and profitability highlights the company's stable financial health.85
Very Positive
Balance Sheet
Volvo AB's balance sheet is stable with a Debt-to-Equity Ratio of approximately 1.30, indicating a moderate level of leverage. The Return on Equity (ROE) in the TTM is about 23.57%, showing effective use of equity capital to generate profits. The Equity Ratio stands at 28.51%, reflecting a solid capital structure. While the equity ratio is healthy, continual monitoring of debt levels is advisable to ensure long-term financial stability.78
Positive
Cash Flow
The company's cash flow position is strong with a positive Free Cash Flow of 23.63 billion in the TTM. However, there is a noticeable decrease in Free Cash Flow compared to the previous year, reflecting a -15.76% growth rate. The Operating Cash Flow to Net Income Ratio stands at 0.96, indicating efficient cash generation from operations. Despite the decrease in Free Cash Flow, Volvo AB maintains a stable cash flow generation, supporting its operational and investment needs.80
Positive
| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 500.08B | 526.82B | 552.76B | 473.48B | 372.22B | 338.45B |
| Gross Profit | 125.84B | 144.05B | 149.32B | 111.74B | 89.75B | 79.13B |
| EBITDA | 76.06B | 91.35B | 89.12B | 67.01B | 63.08B | 47.87B |
| Net Income | 38.06B | 50.39B | 49.83B | 32.72B | 32.79B | 19.32B |
Balance Sheet | ||||||
| Total Assets | 677.60B | 714.56B | 674.07B | 629.06B | 515.86B | 510.82B |
| Cash, Cash Equivalents and Short-Term Investments | 61.63B | 73.49B | 83.42B | 67.18B | 50.79B | 71.92B |
| Total Debt | 265.59B | 258.85B | 233.52B | 205.05B | 151.45B | 152.78B |
| Total Liabilities | 510.59B | 517.20B | 493.33B | 462.83B | 371.74B | 362.68B |
| Stockholders Equity | 163.91B | 194.05B | 177.79B | 162.72B | 141.04B | 145.29B |
Cash Flow | ||||||
| Free Cash Flow | 19.68B | 28.06B | 3.00B | 7.40B | 11.81B | 13.29B |
| Operating Cash Flow | 42.73B | 46.44B | 26.68B | 33.24B | 33.65B | 30.61B |
| Investing Cash Flow | -23.81B | -24.14B | -26.84B | -21.49B | -1.49B | -9.94B |
| Financing Cash Flow | -12.04B | -21.87B | 1.82B | 7.48B | -57.55B | 6.44B |
Volvo AB Technical Analysis
Neutral
29.32
Price Trends
29.35
Negative
28.48
Positive
27.36
Positive
Market Momentum
-0.08
Positive
45.49
Neutral
18.23
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For VLVLY, the sentiment is Neutral. The current price of 29.32 is below the 20-day moving average (MA) of 30.15, below the 50-day MA of 29.35, and above the 200-day MA of 27.36, indicating a neutral trend. The MACD of -0.08 indicates Positive momentum. The RSI at 45.49 is Neutral, neither overbought nor oversold. The STOCH value of 18.23 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for VLVLY.
Volvo AB Peers Comparison
Overall Rating
UnderperformOutperform
Sector (63)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
78 Outperform | $8.88B | 13.92 | 15.52% | 1.45% | 0.41% | -3.90% | |
76 Outperform | $53.43B | 16.91 | 16.77% | 3.89% | -11.92% | -38.21% | |
73 Outperform | $59.95B | 16.41 | 21.80% | 6.33% | -7.08% | -30.36% | |
66 Neutral | $202.09B | 21.94 | 52.73% | 1.33% | -4.87% | -10.47% | |
63 Neutral | $10.84B | 15.52 | 7.44% | 2.00% | 2.86% | -14.57% | |
63 Neutral | $128.80B | 24.91 | 21.59% | 1.35% | -20.63% | -34.82% | |
56 Neutral | $14.03B | 17.07 | 10.79% | 2.28% | -21.70% | -57.68% |
* Industrials Sector Average
Performance Comparison
VLVLY
Volvo AB
29.32
5.66
23.92%
CAT
Caterpillar
431.52
88.98
25.98%
CNH
CNH Industrial
10.97
0.88
8.72%
DE
Deere
470.51
81.33
20.90%
OSK
Oshkosh
137.02
37.00
36.99%
PCAR
Paccar
102.51
10.63
11.57%
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.