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Vestas Wind Systems AS (VWDRY)
OTHER OTC:VWDRY
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Vestas Wind Systems AS
(OTC:VWDRY)
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Rating:66Neutral
Price Target:
$9.50
▲(16.85% Upside)
Action:DowngradedDate:02/08/26
The score is driven mainly by improved financial performance and a constructive earnings outlook with strong cash generation and capital returns. It is tempered by weak near-term technical momentum, a relatively high P/E with minimal yield support, and operational risks cited on the call (Service underperformance and Offshore ramp-up costs).
Positive Factors
Global market leadership
Vestas' position as a global leader and integrated supplier (turbines plus long‑term service agreements) creates durable scale advantages across procurement, project execution and aftermarket recurring revenue. Scale supports win rates in large tenders and steady service income over multiple years.
Profitability and margin recovery
Material margin recovery versus the 2022 loss year demonstrates structural operating improvements. Sustained positive EBIT before special items and restoring net income profile support reinvestment ability and resilience to project timing volatility, underpinning medium‑term cash generation capacity.
Large backlog and order intake
A multi‑year backlog across Power Solutions and Services provides revenue visibility and supports stable aftermarket streams. Large service backlog in particular underpins recurring cash flows and helps amortize fixed costs, improving predictability of margins over the next several years.
Negative Factors
Service underperformance
A meaningful decline in Service revenue weakens the recurring revenue base and pressurizes high‑margin aftermarket earnings. Recovery is ongoing but incomplete; prolonged underperformance would reduce margin stability, increase reliance on one‑time project revenue and raise execution risk on long‑term service economics.
Offshore ramp‑up costs
Scaling offshore capabilities is capital and execution intensive. Ramp costs, higher depreciation and initial inefficiencies can persist across quarters, compressing margins and requiring sustained volume and execution improvements to realize expected returns and justify increased fixed investments.
Cash flow volatility and sizeable absolute debt
Although cash generation recovered from 2022, a sharp FCF decline and meaningful absolute debt leave less buffer against project delays or margin setbacks. Intermittent working‑capital swings and warranty episodes raise the risk that liquidity and deleveraging plans will be tested if revenue or margins soften.
Vestas Wind Systems AS (VWDRY) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$24.52B
Dividend Yield0.31%
Average Volume (3M)214.53K
Price to Earnings (P/E)27.7
Beta (1Y)0.64
Revenue Growth19.75%
EPS Growth1784.07%
CountryUS
Employees35,927
SectorIndustrials
Sector Strength72
IndustryIndustrial - Machinery
Share Statistics
EPS (TTM)0.17
Shares Outstanding3,029,632,000
10 Day Avg. Volume162,592
30 Day Avg. Volume214,532
Financial Highlights & Ratios
PEG Ratio0.55
Price to Book (P/B)5.91
Price to Sales (P/S)1.27
P/FCF Ratio22.69
Enterprise Value/Market Cap0.83
Enterprise Value/Revenue1.13
Enterprise Value/Gross Profit8.17
Enterprise Value/Ebitda17.22
Forecast
1Y Price TargetN/A
Price Target UpsideN/A
Rating ConsensusHold
Number of Analyst Covering1
EPS Forecast (FY)0.43
Revenue Forecast (FY)$24.66B
Vestas Wind Systems AS Business Overview & Revenue Model
Company DescriptionVestas Wind Systems A/S designs, manufactures, installs, and services wind turbines worldwide. The company operates in two segments, Power Solutions and Service. The Power Solutions segment sells wind power plants, wind turbines, development sites, etc. The Service segment engages in the sale of service contracts, spare parts, and related activities. The company was founded in 1898 and is headquartered in Aarhus, Denmark.
How the Company Makes MoneyVestas generates revenue primarily through the sale of wind turbines and associated services. This includes the manufacturing and installation of turbine systems, which account for a significant portion of its income. Additionally, Vestas offers long-term service agreements (LTSA) that provide ongoing maintenance and support for the wind farms, contributing to a steady revenue stream. The company also benefits from strategic partnerships with energy developers and utility companies, which enhance its market reach and project pipeline. Furthermore, Vestas capitalizes on government incentives and renewable energy policies that promote the adoption of wind energy, allowing it to secure contracts in various regions worldwide.
Vestas Wind Systems AS Key Performance Indicators (KPIs)
Any
Operating Profit by Segment
Data provided by:
The Fly
The FlyVestas Wind Systems AS Earnings Call Summary
Earnings Call Date:Feb 05, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:May 06, 2026
Earnings Call Sentiment Positive
The call presented a largely positive operational and financial picture: record revenue, higher EBIT margin, stronger ROCE and EPS, robust order backlogs, improved warranty performance, and strong cash generation and capital returns (dividend and EUR 150m buyback). However, meaningful challenges remain — notably a 16% decline in Service revenue, Service underperformance versus internal targets, Offshore ramp-up costs and associated margin drag, and one-off restructuring charges. Management provided a clear recovery plan for Service and signaled confidence in the Offshore ramp and long-term margins, while updating capital allocation to return more cash. On balance the positive achievements and financial strength outweigh the stated lowlights, but several operational risks persist into 2026.Q4-2025 Updates
Positive Updates
Record Revenue and Improved Profitability
Full year 2025 revenue of EUR 18.8 billion (up 9% YoY) and gross profit at an all-time high of EUR 2.5 billion. EBIT margin before special items improved to 5.7% (up 1.4 percentage points YoY).
Strong Earnings per Share and ROCE
EPS rose 60% to EUR 0.8 for the year and ROCE improved to 11.8%, reflecting stronger returns from operations and capital deployment.
Record Order Backlogs and Order Intake
Full-year order intake totaled 16.3 GW, powering record-high order backlogs: Power Solutions backlog reached EUR 33.2 billion (up EUR 1.6 billion YoY) and Service backlog increased to EUR 38.7 billion (from EUR 36.8 billion a year ago, despite ~EUR 1.9 billion FX headwind).
Power Solutions Momentum and Stable ASP
Q4 Power Solutions order intake 6.5 GW (including an 828 MW Onshore Brazil order and a 390 MW Offshore Korea project). ASP on new orders was EUR 1.01 million per MW, unchanged from prior quarter, indicating stable pricing.
Strong Cash Generation and Net Cash Position
Operating cash flow of EUR 1.3 billion in Q4 and adjusted free cash flow of EUR 872 million in Q4. Year-end net cash position of EUR 1.2 billion after dividends and share buybacks.
Capital Return and Updated Capital Framework
Proposed dividend and an immediate share buyback of EUR 150 million; updated policy to target net interest-bearing debt/EBITDA between -1x and +1x and to return at least 40% of net profit through dividends and buybacks.
Warranty and Quality Improvements
Full-year warranty costs reduced to 3.2% of revenue (down from 6.4% in 2022), the lowest in five years, and lost production factor (LPF) improved as site repairs completed.
Sustainability and Safety Achievements
Vestas-produced turbines in 2025 are expected to avoid a record ~463 million tonnes of GHG over lifetime; supplied 22,000 tonnes of low-emission steel. Safety: TRIR steady at 2.7, no fatalities and a reduction in frequency of serious injuries.
Negative Updates
Service Revenue Decline and Underperformance
Service revenue fell 16% YoY for 2025; Service delivered on revised EBIT guidance but outcome fell short of internal performance targets. Q4 Service EBIT impacted by extra costs at specific sites.
Offshore Ramp-Up Costs Dragging Profitability
Manufacturing ramp-up and Offshore scale-up led to extra costs, higher depreciations and a profitability drag; Q4 EBIT margin before special items fell to 9.3% (down 3.1 percentage points YoY) driven by ramp-up costs in Offshore and lower Service revenue.
Special Items and Restructuring Charges
Q4 incurred negative special items of EUR 56 million related to the Operating Model Reset, including redundancy costs and non-cash impairments tied to a reduction of 900 positions.
Warranty Consumption Spike in Q4
Warranty consumption in Q4 was EUR 251 million (warranty cost in quarter EUR 207 million = 3.3% of revenue) due mainly to finalization of repairs; elevated warranty consumption temporarily pressured cash flow and margins.
Service Recovery Still in Progress
Management states Service is 'halfway' through recovery plan with the program continuing through 2026; unit cost pressures (wage inflation, material indexation, tariffs) and operational inefficiencies remain material risks to margin recovery.
Q4 Operating Cash Flow and Cash Flow Variability
Although quarterly cash generation was strong, operating cash flow in Q4 declined vs prior-year Q4 primarily due to higher warranty consumptions and net working capital changes, underscoring near-term volatility.
Market and Execution Risks
External challenges cited include geopolitical/trade volatility, permitting and auction design uncertainty in some markets, and region-specific supply-chain disruptions which can affect project timelines and costs.
Organizational Simplification Is Painful
Operating Model Reset required workforce reductions (900 roles) and rightsizing; management signals further rightsizing and simplification ahead, which implies continued restructuring costs and organizational disruption.
Company Guidance
Vestas guided 2026 revenue of EUR 20–22 billion with an EBIT margin before special items of 6–8% (Service EBIT margin 15.5–17.5%) and total investments around EUR 1.2 billion. The company reiterated a capital‑allocation framework targeting net interest‑bearing debt/EBITDA between -1x and +1x (year‑end 2025: net cash ~EUR 1.2 billion, -0.6x), a commitment to return at least 40% of net profit via dividend and buybacks (proposed dividend DKK 0.74 per share, ≈EUR 100 million, plus an immediate EUR 150 million share buyback). Management pointed to strong cash and working‑capital metrics supporting the outlook: Q4 operating cash flow EUR 1.3 billion, adjusted free cash flow EUR 872 million, net working capital -EUR 3.1 billion (improved EUR 830 million YoY); FY2025 context included revenue EUR 18.8 billion, EBIT margin 5.7%, ROCE 11.8%, order intake 16.3 GW and backlogs (Service EUR 38.7 billion; Power Solutions EUR 33.2 billion).Vestas Wind Systems AS Financial Statement Overview
Summary
Strong turnaround in profitability and margins since 2022, with positive operating and free cash flow in 2024–2025. Offsets include revenue softness/volatility, a sharp 2025 free-cash-flow decline, and still-sizeable absolute debt despite improved leverage.Income Statement
Profitability has materially improved versus the 2022 loss year, with annual net income rising from -$1.57B (2022) to $77M (2023), $499M (2024), and $778M (2025). Margins also expanded meaningfully (gross margin ~0.8% in 2022 to ~13.8% in 2025; net margin to ~4.3% in 2025), supporting a healthier earnings profile. The key weakness is growth consistency: revenue rose strongly in 2024 but declined in 2025 (revenue growth -3.284), indicating demand/price or project timing volatility despite better margins.74
Positive
Balance Sheet
Leverage is moderate for an industrial business, with debt-to-equity improving from 1.12 (2023) to 0.87 (2025), but still meaningfully higher than the low-leverage 2020–2021 period (~0.29–0.30). Equity has rebuilt from 2023 levels and returns on equity are strong in 2024–2025 (~14% to ~20%), signaling improved efficiency and profitability. The main risk is that absolute debt remains sizeable (~$3.37B in 2025), leaving the balance sheet more exposed if margins weaken or revenue softness persists.67
Positive
Cash Flow
Cash generation is solid in absolute terms, with operating cash flow above $2.2B in both 2024 and 2025 and free cash flow remaining positive ($1.18B in 2024; $1.01B in 2025). However, free cash flow declined sharply in 2025 (free cash flow growth -46.468), suggesting higher working-capital needs, capex, or timing effects. Free cash flow covers less than half of net income in 2024–2025 (~0.50 to ~0.44), which is a mild quality-of-earnings watch item even though cash flow has clearly recovered from the negative 2022 period.64
Positive
| Breakdown | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 18.08B | 17.30B | 15.38B | 14.49B | 15.59B |
| Gross Profit | 2.50B | 2.06B | 1.28B | 118.00M | 1.56B |
| EBITDA | 2.24B | 1.76B | 1.13B | -545.00M | 1.26B |
| Net Income | 778.00M | 499.00M | 77.00M | -1.57B | 134.00M |
Balance Sheet | |||||
| Total Assets | 25.73B | 24.64B | 22.51B | 20.09B | 19.71B |
| Cash, Cash Equivalents and Short-Term Investments | 4.53B | 3.94B | 3.32B | 2.35B | 2.51B |
| Total Debt | 3.37B | 3.27B | 3.39B | 2.43B | 1.44B |
| Total Liabilities | 21.85B | 21.10B | 19.47B | 17.03B | 14.95B |
| Stockholders Equity | 3.87B | 3.53B | 3.03B | 3.04B | 4.75B |
Cash Flow | |||||
| Free Cash Flow | 1.01B | 1.18B | 135.00M | -1.01B | 120.00M |
| Operating Cash Flow | 2.21B | 2.33B | 1.03B | -195.00M | 996.00M |
| Investing Cash Flow | -1.14B | -1.34B | -782.00M | -679.00M | -939.00M |
| Financing Cash Flow | -522.53M | -478.00M | 743.00M | 846.00M | -715.00M |
Vestas Wind Systems AS Technical Analysis
Negative
8.13
Price Trends
9.10
Negative
8.32
Negative
7.13
Positive
Market Momentum
-0.27
Positive
35.93
Neutral
57.34
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For VWDRY, the sentiment is Negative. The current price of 8.13 is below the 20-day moving average (MA) of 8.60, below the 50-day MA of 9.10, and above the 200-day MA of 7.13, indicating a neutral trend. The MACD of -0.27 indicates Positive momentum. The RSI at 35.93 is Neutral, neither overbought nor oversold. The STOCH value of 57.34 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for VWDRY.
Vestas Wind Systems AS Peers Comparison
UnderperformOutperform
Sector (63)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
70 Outperform | $35.85B | 63.14 | 5.35% | 0.10% | 4.20% | -34.47% | |
67 Neutral | $77.39B | 27.32 | 25.14% | 1.48% | -1.78% | 27.35% | |
66 Neutral | $24.52B | 27.74 | 22.09% | 0.31% | 19.75% | 1784.07% | |
63 Neutral | $10.79B | 15.43 | 7.44% | 2.01% | 2.89% | -14.66% | |
63 Neutral | $5.49B | 199.82 | 1.71% | ― | 7.81% | ― | |
60 Neutral | $12.98B | 82.32 | 6.22% | ― | 5.52% | 9.03% | |
47 Neutral | $9.89B | 249.36 | 2.25% | ― | 5.47% | -75.40% |
* Industrials Sector Average
VWDRY
Vestas Wind Systems AS
8.13
3.19
64.57%
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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.