Volvo AB (VLVLY) AI Stock Analysis

• Market Cap: $62.55B
• Dividend Yield: 5.84%
• Average Volume (3M): 15.91K
• Price to Earnings (P/E): 17.4
• Beta (1Y): 1.07
• Revenue Growth: -4.42%
• EPS Growth: -28.93%
• Country: US
• Employees: 91,154
• Sector: Industrials
• Sector Strength: 72
• Industry: Agricultural - Machinery
• EPS (TTM): 0.53
• Shares Outstanding: 1,591,163,600
• 10 Day Avg. Volume: 0
• 30 Day Avg. Volume: 15,907
• PEG Ratio: -0.49
• Price to Book (P/B): 3.36
• Price to Sales (P/S): 1.25
• P/FCF Ratio: 23.37
• Enterprise Value/Market Cap: 12.12
• Enterprise Value/Revenue: 1.58
• Enterprise Value/Gross Profit: 6.49
• Enterprise Value/Ebitda: 10.43
• 1Y Price Target: N/A
• Price Target Upside: N/A
• Rating Consensus: N/A
• Number of Analyst Covering: 0
• EPS Forecast (FY): 2.32
• Revenue Forecast (FY): $53.62B

• Rating: 70 Outperform
• Price Target: $34.00 ▲(14.21% Upside)
• Action: Reiterated Date: 01/30/26
• Date: Action: Reiterated 01/30/26

Overall score reflects solid underlying financial quality and constructive earnings-call signals (strong margins/cash generation and upgraded 2026 market forecasts), tempered by a weakening top-line/profit trajectory and meaningful leverage. Technicals show an uptrend but are overextended, and valuation is supported by a high dividend yield though the P/E is not especially cheap.

Positive Factors

Profitability and margins

Sustained double-digit operating margins and sizeable adjusted operating income indicate durable pricing power, efficient manufacturing and product mix. This supports long‑term cash generation and ROCE, helping weather cyclical downturns and fund investments without eroding core profitability.

Strong cash generation & net cash

Consistently positive operating cash flow and a substantial net cash position in industrial operations provide financial flexibility for capex, R&D and dividends. Reliable cash conversion underpins reinvestment in product programs and cushions balance sheet stress across cycles.

Resilient recurring service revenue

A sizable and growing service business (~26% of revenues) creates recurring, higher‑margin cash flows that reduce cyclicality tied to new equipment sales. Aftermarket & telematics revenue supports customer retention, lifetime value and steady margin contribution over multiple quarters.

Negative Factors

Revenue contraction trend

Back‑to‑back top‑line declines and falling profits signal weakened end‑market demand and limited operating leverage. Persistent revenue shrinkage erodes margin buffers and makes funding growth initiatives or sustaining capex harder without either structural margin gains or market recovery.

Meaningful leverage

Elevated leverage reduces financial flexibility and increases interest and refinancing risk during downturns. With equity declined in 2025, the balance sheet is less resilient to shocks, constraining ability to pursue acquisitions, absorb cyclical hits or accelerate capex without raising costs or capital.

Financial Services credit deterioration

Worsening credit metrics in Volvo Financial Services reduce net yield and raise provisioning volatility, tying up capital and depressing group returns. If delinquencies persist, FS could drag industrial margins and require tighter underwriting or higher funding, limiting support for sales.

Volvo AB Business Overview & Revenue Model

Company Description

AB 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 Money

Volvo AB primarily makes money by selling commercial vehicles and equipment and by monetizing their lifecycle through service and financing. Key revenue streams include: (1) Product sales: revenue from the sale of heavy-duty trucks (its largest business), construction equipment (e.g., excavators, wheel loaders), and power solutions (engines and complete power systems for marine and industrial applications). These are sold through a mix of direct sales and independent/dealer networks, often with customization and body/build options depending on customer use cases. (2) Aftermarket and services: recurring revenue from spare parts, maintenance and repair services, service contracts, and workshop labor across its installed base. This stream is supported by the need to keep fleets and machines operating (uptime), and can be enhanced by connected vehicle services, diagnostics, and fleet/asset management offerings that help customers reduce fuel/energy use and improve utilization. (3) Volvo Financial Services: earnings from financing and leasing trucks and equipment, and related products such as insurance offerings and other financial services (where offered). This unit generates interest income, fees, and other finance-related revenue while also supporting equipment sales by providing customers with purchasing and fleet renewal options. (4) Used products and remarketing (where applicable): revenue from the resale/remarketing of pre-owned trucks and equipment, often linked to trade-ins and lease returns, which can also stimulate new equipment demand. Factors that contribute meaningfully to earnings include the size of the global installed base (driving parts/service demand), dealership and service network coverage, and the mix of service contracts and financing attached to new equipment sales; profitability is also influenced by cyclical demand in freight, construction, and industrial activity, as well as input costs and pricing.

Volvo AB Financial Statement Overview

Summary

Solid profitability and generally healthy cash generation, but the cycle has turned down with two consecutive years of revenue contraction and 2025 profits down versus 2024. Leverage is meaningful (debt-to-equity ~1.33 in 2024) and equity weakened in 2025, reducing flexibility despite strong ROE.

Income Statement

Profitability is solid with healthy operating performance in recent years (2024 net margin ~9.6% and EBIT margin ~13.1%). However, growth has turned negative: revenue declined in 2024 (~-4.7%) and fell further in 2025 (~-8.8%), with 2025 profits down versus 2024—signaling a weaker demand/price cycle and less favorable operating leverage despite still-strong absolute earnings.

Balance Sheet

The company carries meaningful leverage (debt-to-equity ~1.33 in 2024), which is manageable but reduces flexibility in a downturn. Equity returns have been strong (ROE ~26% in 2024), but equity fell in 2025 versus 2024 while debt remains high, suggesting balance-sheet strength has softened somewhat even as the asset base remains sizable.

Cash Flow

Cash generation is generally supportive: operating cash flow is consistently positive and free cash flow rebounded strongly in 2025 (up ~45.9% year over year). That said, cash conversion has been uneven—2024 free cash flow was only ~60% of net income, and 2023 showed particularly weak free cash flow relative to profits—indicating working-capital or investment swings that can create volatility.

Breakdown	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	479.18B	526.82B	552.76B	473.48B	372.22B
Gross Profit	116.87B	144.05B	149.32B	111.74B	89.75B
EBITDA	72.70B	91.35B	89.64B	67.01B	63.08B
Net Income	34.46B	50.39B	49.83B	32.72B	32.79B
Balance Sheet
Total Assets	648.59B	714.56B	674.07B	629.06B	515.86B
Cash, Cash Equivalents and Short-Term Investments	73.50B	73.49B	83.42B	67.18B	50.79B
Total Debt	248.06B	258.85B	233.52B	205.05B	151.45B
Total Liabilities	470.11B	517.20B	493.33B	462.83B	371.74B
Stockholders Equity	178.40B	194.05B	177.79B	162.72B	141.04B
Cash Flow
Free Cash Flow	25.62B	28.06B	3.00B	7.40B	11.81B
Operating Cash Flow	42.86B	46.44B	26.68B	33.24B	33.65B
Investing Cash Flow	-25.83B	-24.14B	-26.84B	-21.49B	-1.49B
Financing Cash Flow	-23.86B	-21.87B	1.82B	7.48B	-57.55B

Volvo AB Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 29.77
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Positive
• STOCH: 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 29.77 is below the 20-day moving average (MA) of 35.93, below the 50-day MA of 36.20, and below the 200-day MA of 30.90, indicating a bearish trend. The MACD of -1.24 indicates Positive momentum. The RSI at 25.73 is Positive, neither overbought nor oversold. The STOCH value of 0.04 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

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
CAT	75 Outperform	$316.80B	30.12	45.10%	0.98%	-1.51%	-9.69%
DE	73 Outperform	$151.19B	54.83	18.93%	1.34%	-11.66%	-27.80%
PCAR	72 Outperform	$58.51B	24.25	12.57%	3.83%	-15.29%	-42.93%
VLVLY	70 Outperform	$62.55B	17.37	19.41%	5.84%	-4.42%	-28.93%
OSK	66 Neutral	$8.79B	12.46	14.57%	1.56%	-2.28%	-0.53%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%
CNH	59 Neutral	$12.34B	22.56	6.58%	2.67%	-18.10%	-65.24%