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WEG (WEGZY)
OTHER OTC:WEGZY
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WEG (WEGZY) AI Stock Analysis

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WEGZY

WEG

(OTC:WEGZY)

Rating:69Neutral
Price Target:
$7.50
â–²(7.45% Upside)
WEGZY's overall score is primarily driven by its strong financial performance and positive earnings call, which highlight robust revenue growth and strategic positioning. However, bearish technical indicators and modest valuation metrics temper the overall outlook.

WEG (WEGZY) vs. SPDR S&P 500 ETF (SPY)

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: |
Next Earnings Date:Oct 22, 2025
Earnings Call Sentiment Neutral
The earnings call revealed healthy revenue growth and strong EBITDA performance, supported by strategic acquisitions and sustainability recognition. However, challenges persist in the wind generation segment and long-cycle equipment due to global political and economic uncertainties.
Q2-2025 Updates
Positive Updates
Net Operating Revenue Growth
Net operating revenue grew 10.1% compared to the second quarter of 2024. This growth was driven by positive performance in the solar generation business in Brazil and growth in power generation, transmission, and distribution businesses abroad, particularly in North America.
EBITDA and Margin Performance
EBITDA reached BRL 2.3 billion, up 6.5% from 2Q '24. The EBITDA margin closed the quarter at 22.1%, remaining healthy despite a slight decline compared to the same period last year.
Sustainability Recognition
WEG announced significant improvement in the FTSE4Good Index, reflecting ongoing efforts to foster sustainable business practices.
Strategic Acquisition
WEG announced the acquisition of assets from Heresite Protective Coatings, a U.S.-based industrial coatings company, boosting its presence in the industrial coatings market.
Negative Updates
Wind Generation Revenue Decline
There was a significant drop in revenue from the wind generation business in Brazil, impacting overall growth.
Challenges in Long-Cycle Equipment
Demand for long-cycle equipment, such as medium voltage electric motors and automation panels, slowed down due to a cautious environment for large-scale investments.
Global Economic and Political Uncertainty
The current global political and economic scenario impacted decision-making for new investments, particularly in long-cycle equipment.
Company Guidance
In WEG's Second Quarter 2025 Earnings Conference Call, the company reported a 10.1% increase in net operating revenue compared to the same period in 2024, driven by strong performance in solar generation and power generation sectors, particularly in North America. Despite a significant decline in the wind generation sector, EBITDA reached BRL 2.3 billion, marking a 6.5% increase from the previous year, with an EBITDA margin of 22.1%. The return on invested capital remained robust at 32.9%, though slightly lower than last year due to increased investments in fixed assets and acquisitions. Key financial metrics such as revenue growth and operating margins were bolstered by a diversified product portfolio and strategic global operations, which helped mitigate macroeconomic challenges. The company highlighted ongoing investments in expanding production capacities, particularly in Brazil and Mexico, while emphasizing the importance of monitoring geopolitical and economic factors that might impact future performance.

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
92
Very Positive
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.
Balance Sheet
88
Very Positive
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.
Cash Flow
85
Very Positive
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.
BreakdownTTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue40.97B37.99B32.50B29.90B23.56B17.47B
Gross Profit13.77B12.81B10.80B8.70B6.96B5.44B
EBITDA10.33B8.89B7.37B5.76B4.90B3.27B
Net Income6.41B6.04B5.73B4.21B3.59B2.34B
Balance Sheet
Total Assets39.84B41.49B31.50B28.13B23.93B19.93B
Cash, Cash Equivalents and Short-Term Investments5.67B8.00B7.08B4.98B3.22B4.48B
Total Debt3.35B4.42B3.39B4.01B2.11B1.97B
Total Liabilities16.69B18.36B13.64B12.89B9.92B8.00B
Stockholders Equity22.22B22.20B17.34B14.83B13.60B11.56B
Cash Flow
Free Cash Flow3.83B5.40B5.36B1.81B92.04M3.37B
Operating Cash Flow6.14B7.25B7.02B2.98B939.38M3.93B
Investing Cash Flow-2.79B-4.09B-1.71B-1.35B-683.87M207.38M
Financing Cash Flow-4.90B-2.76B-2.96B191.91M-1.44B-2.36B

WEG Technical Analysis

Technical Analysis Sentiment
Neutral
Last Price6.98
Price Trends
50DMA
7.04
Negative
100DMA
7.39
Negative
200DMA
8.04
Negative
Market Momentum
MACD
>-0.01
Negative
RSI
53.25
Neutral
STOCH
58.59
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For WEGZY, the sentiment is Neutral. The current price of 6.98 is above the 20-day moving average (MA) of 6.83, below the 50-day MA of 7.04, and below the 200-day MA of 8.04, indicating a neutral trend. The MACD of >-0.01 indicates Negative momentum. The RSI at 53.25 is Neutral, neither overbought nor oversold. The STOCH value of 58.59 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for WEGZY.

WEG Peers Comparison

Overall Rating
UnderperformOutperform
Sector (64)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
76
Outperform
$18.14B30.2217.15%0.89%-0.25%-7.32%
74
Outperform
$24.38B10.7216.72%1.16%-8.23%54.92%
73
Outperform
$38.20B39.8728.46%1.54%-8.23%-3.29%
69
Neutral
$29.34B26.1629.69%0.83%5.50%-3.89%
67
Neutral
$32.17B63.205.21%0.10%4.67%-36.65%
64
Neutral
$10.75B15.697.62%2.01%2.75%-15.14%
63
Neutral
$34.15B23.00-33.93%1.86%-0.09%5.47%
* Industrials Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
WEGZY
WEG
6.98
-2.27
-24.54%
DOV
Dover
177.75
0.79
0.45%
PNR
Pentair
110.64
25.00
29.19%
ROK
Rockwell Automation
339.76
84.91
33.32%
IR
Ingersoll Rand
80.95
-6.42
-7.35%
OTIS
Otis Worldwide
87.00
-3.13
-3.47%
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.Date of analysis: Aug 19, 2025