Volvo AB (VLVLY) AI Stock Analysis

Compare

317 Followers

Top Page

Volvo AB

(OTC:VLVLY)

Rating:75Outperform

Price Target:

$31.00

▲(12.56%Upside)

Volvo AB's overall stock score is driven primarily by its robust financial performance and reasonable valuation. The company's stable profitability and healthy balance sheet are significant strengths. Technical analysis presents a mixed short-term outlook with potential for a rebound. The balanced sentiment from the earnings call highlights both opportunities and risks, particularly in North America and from revenue declines. These factors combined give Volvo AB a solid investment profile within its industry.

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

Market Cap

$57.06B

Dividend Yield1.97%

Average Volume (3M)1.64K

Price to Earnings (P/E)13.2

Beta (1Y)0.99

Revenue Growth-6.74%

EPS Growth-9.79%

CountryUS

Employees91,154

SectorIndustrials

Sector Strength90

IndustryAgricultural - Machinery

Share Statistics

EPS (TTM)0.51

Shares Outstanding1,588,485,200

10 Day Avg. Volume0

30 Day Avg. Volume1,639

Financial Highlights & Ratios

PEG Ratio-1.38

Price to Book (P/B)2.71

Price to Sales (P/S)0.00

P/FCF Ratio22.46

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 DescriptionVolvo AB, commonly referred to as the Volvo Group, is a leading global manufacturer of trucks, buses, construction equipment, and marine and industrial engines. The company operates through several segments including Trucks, Construction Equipment, Buses, Volvo Penta, and Financial Services. Headquartered in Gothenburg, Sweden, Volvo Group is renowned for its commitment to quality, safety, and environmental care, consistently delivering innovative solutions to enhance the efficiency and sustainability of its products.

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 Earnings Call Summary

Earnings Call Date:Apr 23, 2025

(Q1-2025)

% Change Since: 4.36%|

Next Earnings Date:Jul 17, 2025

Earnings Call Sentiment Neutral

The call presented a mixed picture with several positive aspects, such as strong order intake and market leadership in Europe, but also significant challenges, particularly in North America, with revenue and delivery declines. The sentiment is balanced between these factors.

Q1-2025 Updates

Positive Updates

Positive Order Intake

Globally, order intake for the quarter was positive compared to Q1 last year for all business areas. Orders for fully electric vehicles increased by 138%, driven mainly by Renault Trucks and SDLG machines in China.

European Market Leadership

Volvo Trucks maintained market leadership in Europe with a market share exceeding 20% for the first time. Combined with Renault, the group reached over 30% market share in Europe.

Strong Financial Position

The company ended the quarter with a net cash position of SEK77.9 billion and a return on capital employed for industrial operations at 31.8%.

Dividend Distribution

For fiscal year '24, the company distributed SEK37.6 billion to shareholders, the largest dividend from a Swedish company.

Resilient Service Business

The service business showed resilience with underlying service sales growing by 2% year-over-year, adjusted for currency.

Negative Updates

Revenue Decline

Net sales declined to SEK122 billion, a year-over-year drop of 7%. Vehicle and machine sales declined 9% adjusted for currency.

North America Challenges

Increased uncertainty in North America led to a reduced market forecast for Group Trucks and VCE. The region faced under-absorption in production and hesitation among customers to place orders.

Truck Deliveries Decline

Total truck deliveries declined 12% in the quarter with heavy-duty deliveries holding up relatively better at minus 7%.

Operating Income Drop

Adjusted operating income came in at SEK13.3 billion, corresponding to a margin of 10.9%, affected by lower volumes and under-absorption.

Construction Equipment Sales Decline

Construction Equipment sales of machines were down 10%, driven by lower volumes in Europe and North America.

Company Guidance

In the first quarter of the fiscal year 2025, Volvo Group reported a mixed performance in different regions and segments, reflecting global market uncertainties. Net sales declined to SEK122 billion, marking a 7% drop year-over-year, with vehicle sales down 8% and service sales showing a slight 2% increase, adjusted for currency and divestments. The adjusted operating income was SEK13.3 billion, with a margin of 10.9%. The company noted a 12% decline in total truck deliveries and a 7% decrease in Construction Equipment deliveries, though order intake improved across all business areas compared to the previous year. Volvo Trucks maintained market leadership in Europe with a 20.1% market share, while Renault and Mack brands showed growth in truck orders. The electrification segment saw a 138% increase in orders for fully electric vehicles, driven by Renault Trucks and SDLG in China. Despite a challenging North American market, where the forecast was adjusted downward due to increased uncertainties, Mack Trucks regained market share with improvements in supply chain issues. The group's financial position remained strong, with a net cash position of SEK77.9 billion and a return on capital employed in industrial operations at 31.8%. Earnings per share were reported at SEK4.86. The company continues to focus on innovation, cost control, and adapting to market dynamics, emphasizing the importance of maintaining strong regional value chains and global capabilities.

Volvo AB Financial Statement Overview

Summary

Volvo AB demonstrates a robust financial profile with strong profitability and efficient operations. The income statement shows healthy margins and profitability, though a slight revenue decline is noted. The balance sheet is stable with moderate leverage, and cash flows are strong despite a decrease in Free Cash Flow. Overall, the financial health remains solid, positioning the company well in the industry.

Income Statement

Very Positive

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.

Balance Sheet

Positive

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.

Cash Flow

Positive

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.

TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
517.43B	526.82B	552.76B	473.48B	372.22B	338.45B
	Gross Profit
138.19B	144.05B	149.32B	111.74B	89.75B	79.13B
	EBIT
62.32B	66.61B	67.30B	45.71B	43.07B	27.48B
	EBITDA
86.36B	91.35B	89.12B	67.01B	63.08B	47.87B
	Net Income Common Stockholders
46.20B	50.39B	49.83B	32.72B	32.79B	19.32B
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
84.27B	73.49B	83.42B	67.18B	50.79B	71.92B
	Total Assets
654.42B	714.56B	674.07B	629.06B	515.86B	510.82B
	Total Debt
217.97B	258.85B	233.52B	205.05B	151.45B	152.78B
	Net Debt
133.80B	185.58B	159.99B	137.96B	100.83B	81.07B
	Total Liabilities
475.77B	517.20B	493.33B	462.83B	371.74B	362.68B
	Stockholders Equity
175.09B	194.05B	177.79B	162.72B	141.04B	145.29B
Cash Flow		Free Cash Flow
23.63B	28.06B	3.00B	7.40B	11.81B	13.29B
	Operating Cash Flow
44.38B	46.44B	26.68B	33.24B	33.65B	30.61B
	Investing Cash Flow
-22.28B	-24.14B	-26.84B	-21.49B	-1.49B	-9.94B
	Financing Cash Flow
-18.88B	-21.87B	1.82B	7.48B	-57.55B	6.44B

Volvo AB Technical Analysis

Technical Analysis Sentiment

Positive

Last Price27.54

Price Trends

50DMA

26.96

Positive

100DMA

27.61

Positive

200DMA

25.87

Positive

Market Momentum

MACD

0.02

Positive

RSI

56.02

Neutral

STOCH

62.23

Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For VLVLY, the sentiment is Positive. The current price of 27.54 is below the 20-day moving average (MA) of 27.93, above the 50-day MA of 26.96, and above the 200-day MA of 25.87, indicating a bullish trend. The MACD of 0.02 indicates Positive momentum. The RSI at 56.02 is Neutral, neither overbought nor oversold. The STOCH value of 62.23 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for VLVLY.

Volvo AB Peers Comparison

Overall Rating

UnderperformOutperform

Sector (66)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
PCAR	77 Outperform	$49.76B	14.38	19.90%	1.33%	-8.64%	-31.57%
VLVLY	75 Outperform	$57.06B	13.18	25.11%	1.97%	-6.74%	-9.79%
DE	75 Outperform	$140.83B	25.16	24.07%	1.18%	-22.26%	-37.83%
CAT	73 Outperform	$166.19B	17.22	55.67%	1.57%	-5.58%	-7.37%
CNH	66 Neutral	$15.91B	15.32	13.26%	1.95%	-21.99%	-52.11%
Sector *	66 Neutral	$4.49B	12.34	5.40%	248.65%	4.13%	-12.33%
AGCO	55 Neutral	$7.53B	46.40	-13.60%	1.15%	-23.02%	-152.78%

* Industrials Sector Average

Performance Comparison

VLVLY

Volvo AB

28.12

3.67

15.01%

AGCO

Agco

102.65

2.07

2.06%

CAT

Caterpillar

358.57

36.49

11.33%

CNH

CNH Industrial

12.88

3.10

31.70%

Deere

515.82

156.03

43.37%

PCAR

Paccar

94.78

-7.00

-6.88%

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.