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WEG S.A. Sponsored ADR (WEGZY)
:WEGZY
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WEG
(OTC:WEGZY)
Rating:76Outperform
Price Target:―
WEG (WEGZY) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$31.97B
Dividend Yield0.38%
Average Volume (3M)1.33K
Price to Earnings (P/E)28.7
Beta (1Y)0.83
Revenue Growth7.21%
EPS Growth-4.25%
CountryUS
Employees47,529
SectorIndustrials
Sector Strength83
IndustryIndustrial - Machinery
Share Statistics
EPS (TTM)0.06
Shares Outstanding4,197,318,000
10 Day Avg. Volume0
30 Day Avg. Volume1,332
Financial Highlights & Ratios
PEG Ratio0.74
Price to Book (P/B)9.02
Price to Sales (P/S)0.00
P/FCF Ratio29.16
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
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 makes money through the sale of its electric-electronic equipment, which constitutes the primary revenue stream. The company offers a broad portfolio of products, such as electric motors, generators, and transformers, catering to industries like oil and gas, mining, and renewable energy. WEG also generates revenue from providing technical services and maintenance solutions, ensuring the longevity and efficiency of its products. Strategic partnerships and long-term contracts with major industrial players further enhance its revenue stability. Additionally, the company's focus on research and development enables it to introduce new products and technologies, maintaining its competitive edge and driving growth in emerging markets.
WEG Earnings Call Summary
Earnings Call Date:Apr 30, 2025
(Q1-2025)
| % Change Since: -14.65%|
Next Earnings Date:Jul 23, 2025
Earnings Call Sentiment Neutral
The earnings call highlighted significant revenue and EBITDA growth driven by strong domestic and international demand, particularly in the energy sector. However, the reduction in EBITDA margin, regional challenges, and increased costs due to exchange rate fluctuations and SG&A pressures balanced the positive aspects.Q1-2025 Updates
Positive Updates
Strong Revenue Growth
Net operating revenue grew 25.5% compared to the first quarter of 2024, driven by energy generation, transmission, and distribution in Brazil and strong performance in the T&D business in North America.
Significant EBITDA Growth
EBITDA reached BRL 2.2 billion, marking a 22.8% increase compared to the first quarter of 2024.
High ROIC
Return on Invested Capital (ROIC) remained high at 33.2%, despite a slight reduction compared to last year.
Successful Acquisition
Completion of the acquisition of REIVAX, a Brazilian company with global operations, expanding WEG's presence in power generation control systems.
Negative Updates
Decline in EBITDA Margin
EBITDA margin decreased by 0.4 percentage points to 21.6%, primarily due to a change in product mix with increased relevance of centralized solar generation business.
Challenges in South America and Europe
Revenue was negatively impacted by lower demand in South America, particularly Argentina, and fluctuations in deliveries in Europe.
Impact of Exchange Rate Fluctuations
Depreciation of the Brazilian real affected costs, impacting profitability in the first quarter.
Pressure on SG&A
Increased SG&A expenses due to the consolidation of Marathon and higher international freight costs.
Company Guidance
In the first quarter of 2025, WEG reported a significant growth in net operating revenue of 25.5% compared to the same quarter in 2024, driven by the strong performance in both domestic and international markets. The EBITDA reached BRL 2.2 billion, marking a 22.8% increase, although the EBITDA margin slightly decreased to 21.6%. The company maintained a high Return on Invested Capital (ROIC) of 33.2%, despite a noted reduction compared to the previous year due to nonrecurring tax incentives and increased invested capital. Notably, the energy generation, transmission, and distribution (GTD) sector contributed substantially to the growth, with centralized solar generation projects bolstering revenues despite a negative impact on consolidated margins. The quarter also saw strategic investments amounting to BRL 621 million, with a focus on expanding production capacities both in Brazil and internationally. Looking ahead, WEG remains optimistic about continued growth, supported by a diversified product strategy and favorable conditions linked to the global energy transition, while being cautious about potential macroeconomic and market volatilities.WEG Financial Statement Overview
Summary
WEG's financial performance is robust, driven by strong profitability, efficient operations, and prudent financial management. The income statement highlights consistent growth with high margins, the balance sheet shows a low-risk leverage profile, and cash flow positions are solid despite minor fluctuations.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 | ||||
| 40.03B | 37.99B | 32.50B | 29.90B | 23.56B | 17.47B | Gross Profit |
| 13.25B | 12.81B | 10.80B | 8.70B | 6.96B | 5.44B | EBIT |
| 7.92B | 7.55B | 6.49B | 4.94B | 4.33B | 2.71B | EBITDA |
| 10.14B | 8.89B | 7.37B | 5.76B | 4.90B | 3.27B | Net Income Common Stockholders |
| 6.26B | 6.04B | 5.73B | 4.21B | 3.59B | 2.34B |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 2.90B | 8.00B | 7.08B | 4.98B | 3.22B | 4.48B | Total Assets |
| 17.37B | 41.49B | 31.50B | 28.13B | 23.93B | 19.93B | Total Debt |
| 2.71B | 4.42B | 3.39B | 4.01B | 2.11B | 1.97B | Net Debt |
| 1.12B | -2.93B | -3.10B | -441.68M | -602.80M | -1.92B | Total Liabilities |
| 7.49B | 18.36B | 13.64B | 12.89B | 9.92B | 8.00B | Stockholders Equity |
| 9.64B | 22.20B | 17.34B | 14.83B | 13.60B | 11.56B |
| Cash Flow | Free Cash Flow | ||||
| 4.09B | 5.40B | 5.36B | 1.81B | 92.04M | 3.37B | Operating Cash Flow |
| 6.21B | 7.25B | 7.02B | 2.98B | 939.38M | 3.93B | Investing Cash Flow |
| -4.41B | -4.09B | -1.71B | -1.35B | -683.87M | 207.38M | Financing Cash Flow |
| -2.97B | -2.76B | -2.96B | 191.91M | -1.44B | -2.36B |
WEG Technical Analysis
Negative
7.63
Price Trends
7.78
Negative
8.18
Negative
8.77
Negative
Market Momentum
-0.05
Negative
47.88
Neutral
46.06
Neutral
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 7.63 is below the 20-day moving average (MA) of 7.64, below the 50-day MA of 7.78, and below the 200-day MA of 8.77, indicating a bearish trend. The MACD of -0.05 indicates Negative momentum. The RSI at 47.88 is Neutral, neither overbought nor oversold. The STOCH value of 46.06 is Neutral, 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 (66)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
79 Outperform | $41.04B | 29.11 | 14.96% | 0.70% | 2.98% | 7.29% | |
79 Outperform | $24.09B | 10.58 | 17.45% | 1.17% | -5.86% | 59.79% | |
76 Outperform | $31.97B | 28.69 | 31.02% | 0.38% | 7.21% | -4.25% | |
70 Neutral | $43.39B | 15.67 | 27.78% | 2.31% | -0.39% | 47.31% | |
69 Neutral | $37.76B | 25.09 | -33.93% | 1.76% | -0.88% | 9.98% | |
68 Neutral | $36.12B | 40.34 | 25.86% | 1.63% | -11.19% | -22.50% | |
66 Neutral | $4.46B | 12.11 | 5.38% | 5.02% | 4.17% | -11.82% |
* Industrials Sector Average
Performance Comparison
WEGZY
WEG
7.63
0.13
1.73%
AME
Ametek
177.76
10.21
6.09%
CMI
Cummins
314.99
43.90
16.19%
DOV
Dover
175.70
-4.84
-2.68%
ROK
Rockwell Automation
321.80
67.93
26.76%
OTIS
Otis Worldwide
95.67
1.31
1.39%
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.