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WEG (WEGZY)
OTHER OTC:WEGZY
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WEG
(OTC:WEGZY)
Rating:75Outperform
Price Target:
$7.50
â–²(12.44% Upside)
WEG (WEGZY) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$28.35B
Dividend Yield0.86%
Average Volume (3M)42.45K
Price to Earnings (P/E)25.4
Beta (1Y)0.78
Revenue Growth5.50%
EPS Growth-3.89%
CountryUS
Employees47,529
SectorIndustrials
Sector Strength75
IndustryIndustrial - Machinery
Share Statistics
EPS (TTM)0.07
Shares Outstanding4,197,318,000
10 Day Avg. Volume29,222
30 Day Avg. Volume42,450
Financial Highlights & Ratios
PEG Ratio7.83
Price to Book (P/B)10.89
Price to Sales (P/S)6.37
P/FCF Ratio44.77
Enterprise Value/Market Cap1.15
Enterprise Value/Revenue0.80
Enterprise Value/Gross Profit2.37
Enterprise Value/Ebitda3.16
Forecast
1Y Price Target
$7.50Price Target Upside12.44% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering1
WEG Business Overview & Revenue Model
Company DescriptionWEG S.A. engages in the production and sale of capital goods in Brazil and internationally. The company offers electric motors, generators, and transformers; gear units and geared motors; hydraulic and steam turbines; frequency converters; motor starters and maneuver devices; control and protection of electric circuits for industrial automation; power sockets and switches; and electric traction solutions for heavy vehicles, SUV vehicles, locomotives, and sea transportation capital goods. It also provides solutions for the generation of renewable and distributed energy through hydro, thermal biomass, wind, and solar energy power plants; solutions for various industry; UPSs and alternators for groups of generators; conventional and movable electric substations; industrial electro electronic equipment systems; industrial paint and varnish; and paints for automotive repainting. WEG S.A. was founded in 1961 and is headquartered in Jaragua do Sul, Brazil.
How the Company Makes MoneyWEG generates revenue primarily through the sale of its industrial electrical equipment and solutions. Key revenue streams include the production and sale of electric motors and generators, which are used in various industries including oil and gas, mining, and renewable energy. The company also earns income from its automation solutions and services, providing integrated systems that enhance operational efficiency for industrial clients. Significant factors contributing to WEG's earnings include its strong global distribution network, strategic partnerships with industrial giants, and continuous investment in research and development to innovate and expand its product offerings. Additionally, WEG benefits from economies of scale and a diversified product portfolio, which help mitigate risks associated with market fluctuations in specific sectors.
WEG Earnings Call Summary
Earnings Call Date:Jul 23, 2025
(Q2-2025)
| % Change Since: -10.11%|
Next Earnings Date:Oct 22, 2025
Earnings Call Sentiment Neutral
The earnings call highlighted strong revenue growth and strategic expansions, particularly in North America and sustainable business practices. However, challenges such as significant declines in wind generation revenue, geopolitical uncertainties affecting long-cycle equipment, and the impact of tariffs were notable concerns.Q2-2025 Updates
Positive Updates
Net Operating Revenue Growth
Net operating revenue grew by 10.1% compared to the second quarter of 2024, driven by strong performance in sectors like solar generation and transmission and distribution projects.
EBITDA Increase
EBITDA reached BRL 2.3 billion, marking a 6.5% increase from the same period last year, with an EBITDA margin of 22.1%.
Return on Invested Capital
Return on invested capital remained high at 32.9%, although it showed a decline due to increased invested capital and nonrecurring tax incentives in the previous year.
Strategic Acquisitions
WEG announced the acquisition of Heresite Protective Coatings, expanding its industrial coatings market presence.
FTSE4Good Index Recognition
WEG improved its standing in the FTSE4Good Index, highlighting its commitment to sustainable business practices.
Healthy T&D Market in North America
Despite some fluctuations, the T&D market in North America remains strong with a full order backlog and plants running at full capacity.
Negative Updates
Decline in Wind Generation Revenue
Significant drop in revenue from the wind generation business, impacting overall growth in Brazil.
Challenges in Long-Cycle Equipment
Deceleration in long-cycle equipment demand due to geopolitical uncertainties and tariffs affecting decision-making for new investments.
Impact of Tariffs
Increased tariffs, especially in the U.S., present challenges that may require strategic adjustments in production and pricing.
Lower Revenue Growth Rate
Organic growth decelerated to 1% year-on-year after excluding the effects of acquisitions and FX adjustments.
Lower Performance in Industrial Generators
Lower performance in generation, particularly in India and exports from Brazil, affecting consolidated growth numbers.
Company Guidance
During WEG's second quarter 2025 earnings conference call, the company provided guidance highlighting several key financial metrics. Net operating revenue increased by 10.1% compared to the same period in 2024, driven by robust performance in Brazil's solar generation sector and continued project deliveries in transmission and distribution (T&D), despite a decline in wind generation revenue. Internationally, growth was noted in the power generation and T&D sectors, especially in North America. WEG's EBITDA reached BRL 2.3 billion, marking a 6.5% increase with an EBITDA margin of 22.1%. The return on invested capital was reported at 32.9%, although it showed a decline from the previous year due to increased invested capital and the absence of nonrecurring tax incentives recognized in the prior period. The company also announced investments totaling BRL 583 million, with 63% allocated in Brazil and 37% internationally, focusing on expanding T&D capacity and increasing productivity. Looking forward, WEG emphasized the importance of monitoring geopolitical and macroeconomic conditions, which could impact business dynamics, but remained confident in its strategy to maintain healthy operational margins through a diversified product portfolio and global presence.WEG Financial Statement Overview
Summary
WEG demonstrates strong financial performance, with high profitability margins and efficient operations. The income statement shows robust growth and efficiency, while the balance sheet reflects low leverage and a solid equity position. Despite minor fluctuations in cash flow growth, the company's cash position remains solid, indicating resilience in the competitive industrial machinery sector.Income Statement
WEG's TTM (Trailing-Twelve-Months) income statement reveals robust financial health with a Gross Profit Margin of 33.1% and a Net Profit Margin of 15.6%. The company has demonstrated consistent revenue growth, with a notable 5.4% increase from the previous year. EBIT and EBITDA margins stand at impressive levels of 19.8% and 25.3% respectively, indicating strong operational efficiency. Overall, the income statement reflects both growth and profitability, positioning WEG well within its industry.92
Very Positive
Balance Sheet
WEG's balance sheet showcases a solid financial foundation with a Debt-to-Equity Ratio of 0.19, indicating low leverage and financial risk. The Return on Equity (ROE) is strong at 29.4%, reflecting efficient utilization of shareholder funds to generate profit. An Equity Ratio of 54.1% further underscores the company's stable financial position. The balance sheet's strengths are complemented by a healthy asset base and equity standing, with minimal weaknesses observed.88
Very Positive
Cash Flow
The cash flow statement highlights WEG's effective cash management with a Free Cash Flow to Net Income Ratio of 0.65, suggesting strong cash generation relative to net earnings. The Operating Cash Flow to Net Income Ratio is 0.99, indicating that operating activities effectively support net income. While the Free Cash Flow Growth Rate shows a slight decline, the overall cash flow position remains robust, supported by prudent capital expenditures, ensuring liquidity and investment capability.85
Very Positive
| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 40.97B | 37.99B | 32.50B | 29.90B | 23.56B | 17.47B |
| Gross Profit | 13.77B | 12.81B | 10.80B | 8.70B | 6.96B | 5.44B |
| EBITDA | 10.33B | 8.89B | 7.37B | 5.76B | 4.90B | 3.27B |
| Net Income | 6.41B | 6.04B | 5.73B | 4.21B | 3.59B | 2.34B |
Balance Sheet | ||||||
| Total Assets | 39.84B | 41.49B | 31.50B | 28.13B | 23.93B | 19.93B |
| Cash, Cash Equivalents and Short-Term Investments | 5.67B | 8.00B | 7.08B | 4.98B | 3.22B | 4.48B |
| Total Debt | 3.35B | 4.42B | 3.39B | 4.01B | 2.11B | 1.97B |
| Total Liabilities | 16.69B | 18.36B | 13.64B | 12.89B | 9.92B | 8.00B |
| Stockholders Equity | 22.22B | 22.20B | 17.34B | 14.83B | 13.60B | 11.56B |
Cash Flow | ||||||
| Free Cash Flow | 3.83B | 5.40B | 5.36B | 1.81B | 92.04M | 3.37B |
| Operating Cash Flow | 6.14B | 7.25B | 7.02B | 2.98B | 939.38M | 3.93B |
| Investing Cash Flow | -2.79B | -4.09B | -1.71B | -1.35B | -683.87M | 207.38M |
| Financing Cash Flow | -4.90B | -2.76B | -2.96B | 191.91M | -1.44B | -2.36B |
WEG Technical Analysis
Negative
6.67
Price Trends
7.25
Negative
7.52
Negative
8.23
Negative
Market Momentum
-0.13
Negative
38.97
Neutral
8.70
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For WEGZY, the sentiment is Negative. The current price of 6.67 is below the 20-day moving average (MA) of 6.81, below the 50-day MA of 7.25, and below the 200-day MA of 8.23, indicating a bearish trend. The MACD of -0.13 indicates Negative momentum. The RSI at 38.97 is Neutral, neither overbought nor oversold. The STOCH value of 8.70 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for WEGZY.
WEG 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 | $42.68B | 29.80 | 14.64% | 0.65% | 2.28% | 7.94% | |
77 Outperform | $55.78B | 19.04 | 27.56% | 1.82% | -1.30% | 53.39% | |
75 Outperform | $28.35B | 25.36 | 29.69% | 0.86% | 5.50% | -3.89% | |
72 Outperform | $24.60B | 10.82 | 16.72% | 1.17% | -8.23% | 54.92% | |
71 Outperform | $39.07B | 40.77 | 28.46% | 1.51% | -8.23% | -3.29% | |
63 Neutral | $10.80B | 16.70 | 6.58% | 2.07% | 2.48% | -16.85% | |
62 Neutral | $34.36B | 23.14 | -33.93% | 1.85% | -0.09% | 5.47% |
* Industrials Sector Average
Performance Comparison
WEGZY
WEG
6.67
-2.81
-29.64%
AME
Ametek
181.36
17.78
10.87%
CMI
Cummins
399.42
104.46
35.41%
DOV
Dover
176.54
-3.21
-1.79%
ROK
Rockwell Automation
342.28
80.58
30.79%
OTIS
Otis Worldwide
87.43
-3.67
-4.03%
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.