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WEG (WEGZY)
OTHER OTC:WEGZY
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WEG
(OTC:WEGZY)
Select Model
Select Model
Rating:74Outperform
Price Target:
$7.50
â–²(10.13% Upside)
WEGZY's strong financial performance and positive earnings call insights are offset by technical indicators suggesting a bearish trend and a high valuation. The company's strategic acquisitions and sustainability efforts are promising, but challenges in specific segments and global uncertainties pose risks.
WEG (WEGZY) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$28.48B
Dividend Yield0.85%
Average Volume (3M)2.40K
Price to Earnings (P/E)25.4
Beta (1Y)0.72
Revenue Growth5.50%
EPS Growth-3.89%
CountryUS
Employees47,529
SectorIndustrials
Sector Strength72
IndustryIndustrial - Machinery
Share Statistics
EPS (TTM)0.07
Shares Outstanding4,197,318,000
10 Day Avg. Volume5,186
30 Day Avg. Volume2,403
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 Cap1.14
Enterprise Value/Revenue0.80
Enterprise Value/Gross Profit2.37
Enterprise Value/Ebitda3.16
Forecast
1Y Price Target
$7.50Price Target Upside10.13% 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: |
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
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.85
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.78
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
6.81
Price Trends
6.86
Negative
7.21
Negative
7.88
Negative
Market Momentum
>-0.01
Positive
45.73
Neutral
37.43
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 6.81 is below the 20-day moving average (MA) of 6.90, below the 50-day MA of 6.86, and below the 200-day MA of 7.88, indicating a bearish trend. The MACD of >-0.01 indicates Positive momentum. The RSI at 45.73 is Neutral, neither overbought nor oversold. The STOCH value of 37.43 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 (63)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
76 Outperform | 17.99B | 29.58 | 16.59% | 0.89% | -0.25% | -7.32% | |
74 Outperform | $28.48B | 25.41 | 29.69% | 0.85% | 5.50% | -3.89% | |
74 Outperform | 23.04B | 9.98 | 30.81% | 1.23% | -8.23% | 54.92% | |
73 Outperform | 38.63B | 39.90 | 28.01% | 1.53% | -8.23% | -3.29% | |
73 Outperform | 32.71B | 62.85 | 5.18% | 0.10% | 4.67% | -36.65% | |
69 Neutral | 35.47B | 23.65 | -28.19% | 1.79% | -0.09% | 5.47% | |
63 Neutral | $10.79B | 15.43 | 7.44% | 2.01% | 2.89% | -14.66% |
* Industrials Sector Average
Performance Comparison
WEGZY
WEG
6.81
-3.09
-31.21%
DOV
Dover
167.99
-21.68
-11.43%
PNR
Pentair
109.76
12.96
13.39%
ROK
Rockwell Automation
343.58
79.68
30.19%
IR
Ingersoll Rand
82.30
-15.77
-16.08%
OTIS
Otis Worldwide
90.38
-11.81
-11.56%
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.