Volvo AB (VLVLY) AI Stock Analysis

• Market Cap: $78.95B
• Dividend Yield: 5.84%
• Average Volume (3M): 8.76K
• Price to Earnings (P/E): 22.2
• Beta (1Y): 1.00
• 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: 1,589,163,000
• 10 Day Avg. Volume: 6,163
• 30 Day Avg. Volume: 8,761
• PEG Ratio: -0.49
• Price to Book (P/B): 3.36
• Price to Sales (P/S): 1.33
• P/FCF Ratio: 23.37
• Enterprise Value/Market Cap: 11.21
• Enterprise Value/Revenue: 1.85
• Enterprise Value/Gross Profit: 7.57
• Enterprise Value/Ebitda: 12.17
• 1Y Price Target: N/A
• Price Target Upside: N/A
• Rating Consensus: N/A
• Number of Analyst Covering: 0
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 70 Outperform
• Price Target: $40.00 ▲(34.36% Upside)

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

Strong cash generation & net cash

Consistent operating cash flow and a large net cash buffer give Volvo durable financial flexibility. This supports multi-year investments (EVs, autonomy), dividends and capital allocation while insulating operations from cyclical downturns and funding working-capital swings without near-term refinancing risk.

High margins and ROCE

Sustained double-digit operating margins and very strong ROCE indicate efficient capital deployment and profitable core operations. High structural returns support reinvestment, R&D and shareholder returns, making the business more resilient to moderate demand swings over the medium term.

Diversified, resilient service business

A large, growing service and parts business provides recurring, higher-margin revenues that are less cyclical than vehicle sales. This diversification improves cash visibility, stabilizes margins through downturns, and underpins long-term customer lock-in via maintenance and spare‑parts ecosystems.

Negative Factors

Two-year revenue contraction

A multi-year top-line decline signals structural demand softness or price pressure in core markets, eroding operating leverage. Sustained revenue weakness can compress margins, limit scale benefits, and force tougher trade-offs on pricing, investment cadence and capacity deployment over the next 2–6 months.

Meaningful leverage

Elevated debt relative to equity reduces financial flexibility and raises sensitivity to rising rates or weaker cash flow. In a downturn or if cash conversion remains uneven, leverage constrains capex, strategic M&A or shareholder returns and increases refinancing and covenant risk over the medium term.

FX, tariffs and under-absorption headwinds

Material and currency headwinds plus persistent under‑absorption (stop‑weeks) create structural margin pressure and operational inefficiency. These factors can durably reduce reported profitability, complicate capacity planning and delay recovery in key regions, particularly North/South America.

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 generates revenue primarily through the sale of vehicles and equipment across its various segments. The main sources of income include the sale of trucks, buses, and construction machinery, as well as parts and maintenance services for these products. Additionally, Volvo earns revenue from financing services and leasing options for customers, which allows them to acquire vehicles without significant upfront costs. The company also benefits from strategic partnerships, such as collaborations with technology firms to develop electric and autonomous vehicles, enhancing its competitive edge and expanding its market reach. Overall, Volvo's focus on innovation and sustainability, along with its diverse product offerings, contribute significantly to its earnings.

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	450.43B	526.82B	552.76B	473.48B	372.22B
Gross Profit	116.87B	144.05B	149.32B	111.74B	89.75B
EBITDA	69.87B	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: Positive
• Last Price: 29.77
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Negative
• STOCH: Negative

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 29.77 is below the 20-day moving average (MA) of 35.06, below the 50-day MA of 32.71, and above the 200-day MA of 29.46, indicating a bullish trend. The MACD of 1.53 indicates Negative momentum. The RSI at 87.29 is Negative, neither overbought nor oversold. The STOCH value of 100.01 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive 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	$323.76B	37.37	43.54%	0.98%	-1.51%	-9.69%
OSK	73 Outperform	$10.56B	15.90	14.90%	1.56%	-2.28%	-0.53%
PCAR	72 Outperform	$67.64B	28.36	12.92%	3.83%	-15.29%	-42.93%
VLVLY	70 Outperform	$78.95B	22.16	19.00%	5.84%	-4.42%	-28.93%
DE	66 Neutral	$153.77B	29.46	20.61%	1.34%	-11.66%	-27.80%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%
CNH	55 Neutral	$14.91B	23.52	7.77%	2.67%	-18.10%	-65.24%