WEG (WEGZY)
OTHER OTC:WEGZY
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WEG
(OTC:WEGZY)
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Rating:66Neutral
Price Target:
$9.50
▲(11.90% Upside)
Action:DowngradedDate:02/27/26
The score is driven primarily by strong underlying profitability and returns, tempered by a sharp TTM revenue decline, higher leverage versus recent history, and weaker free-cash-flow trends. Technicals are mixed with near-term softness despite longer-term support, while valuation is a headwind due to the high P/E partly offset by a solid dividend yield. Earnings-call commentary supports margins and long-term investment plans but highlights near-term growth and macro risks.
Positive Factors
High profitability & returns
Consistently elevated margins and a ~29% ROE indicate durable operating leverage and pricing power across WEG’s industrial portfolio. High profitability supports internal reinvestment and dividends, helping fund CapEx and M&A without immediate reliance on external financing even during slower revenue periods.
Negative Factors
Revenue weakness / project timing
A sharp TTM revenue decline and a 4Q25 drop reflect missed centralized renewables project deliveries and lumpy long‑cycle order timing. Prolonged project timing gaps can compress absolute EBITDA and limit scale benefits, making sustained top‑line recovery dependent on project cadence and macro stabilization.
Read all positive and negative factors
Positive Factors
Negative Factors
High profitability & returns
Consistently elevated margins and a ~29% ROE indicate durable operating leverage and pricing power across WEG’s industrial portfolio. High profitability supports internal reinvestment and dividends, helping fund CapEx and M&A without immediate reliance on external financing even during slower revenue periods.
Read all positive factors
WEG (WEGZY) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$40.91B
Dividend Yield1.85%
Average Volume (3M)25.10K
Price to Earnings (P/E)33.2
Beta (1Y)0.65
Revenue Growth5.17%
EPS Growth-3.66%
CountryUS
Employees47,529
SectorIndustrials
Sector Strength72
IndustryIndustrial - Machinery
Share Statistics
EPS (TTM)0.07
Shares Outstanding4,197,318,000
10 Day Avg. Volume17,152
30 Day Avg. Volume25,104
Financial Highlights & Ratios
PEG Ratio11.96
Price to Book (P/B)11.93
Price to Sales (P/S)5.19
P/FCF Ratio54.51
Enterprise Value/Market Cap5.15
Enterprise Value/Revenue5.15
Enterprise Value/Gross Profit15.90
Enterprise Value/Ebitda21.46
Forecast
1Y Price TargetN/A
Price Target UpsideN/A
Rating ConsensusN/A
Number of Analyst Covering0
EPS Forecast (FY)N/A
Revenue Forecast (FY)N/A
WEG Business Overview & Revenue Model
Company Description
WEG 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 s...
How the Company Makes Money
WEG makes money primarily by selling manufactured electrical equipment and related solutions to industrial customers, utilities, OEMs, and other commercial buyers. Its core revenue streams come from (1) electric motors and motor systems used in in...
WEG Earnings Call Summary
Earnings Call Date:Feb 25, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:Apr 29, 2026
Earnings Call Sentiment Neutral
The call presented a balanced picture: operational and strategic positives (margin expansion, strong external-market deliveries, sizeable 2026 CapEx program, strategic acquisitions and growing services orientation) were offset by near-term revenue pressures (operating revenue down 5.3% YoY), absolute EBITDA decline, exchange-rate headwinds, and tariff/geopolitical uncertainties. Management emphasized ongoing investments and a healthy margin profile but acknowledged that absence of prior renewables project deliveries and currency/tariff volatility may constrain growth in the near term, with larger capacity benefits likely materializing in late 2027 and beyond.Positive Updates
EBITDA Margin Expansion
EBITDA margin increased to 22.4% in 4Q25 (up vs 4Q24) despite revenue pressures; EBITDA reached BRL 2.3 billion (a 4% decrease YoY) but margin improvement was credited to a better product mix and tariff-mitigation actions.
Negative Updates
Operating Revenue Decline
Operating revenue decreased by 5.3% in 4Q25 compared to 4Q24, primarily driven by the absence of centralized wind and solar generation project deliveries that had been concentrated in the prior-year period.
Read all updates
Q4-2025 Updates
Positive
Negative
EBITDA Margin Expansion
EBITDA margin increased to 22.4% in 4Q25 (up vs 4Q24) despite revenue pressures; EBITDA reached BRL 2.3 billion (a 4% decrease YoY) but margin improvement was credited to a better product mix and tariff-mitigation actions.
Read all positive updates
Company Guidance
Guidance: WEG expects continued “strong revenue opportunities” but cautions that exchange‑rate headwinds and the absence of centralized solar projects may weigh on growth—particularly in H1—while maintaining a focus on operational efficiency to support solid margins and returns (ROIC quoted ~32.5%). Key metrics cited: 4Q25 revenue -5.3% y/y, EBITDA BRL 2.3 billion (-4% y/y) with a 22.4% EBITDA margin, investments in the quarter BRL 814 million (50% Brazil / 50% abroad), and a robust CapEx plan for 2026 of BRL 3.6 billion (46% domestic / 54% international). Management reiterated M&A and capacity actions (Sanelec acquisition Dec‑25; new BESS plant in Itajaí due H2‑2027), said they will pursue double‑digit revenue growth if exchange rates stabilize (current BRL/USD ~5.14–5.20 vs Q1‑25 ~5.84) but warned growth could be single‑digit otherwise, and flagged tariff and commodity (e.g., copper) risks and a gradual transformer capacity ramp with more material contribution after 2027–28.WEG Financial Statement Overview
Summary
Income Statement
78
Positive
Balance Sheet
72
Positive
Cash Flow
63
Positive
| Breakdown | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 40.00B | 37.99B | 32.50B | 29.90B | 23.56B |
| Gross Profit | 12.50B | 12.81B | 10.80B | 8.70B | 6.96B |
| EBITDA | 8.70B | 8.89B | 7.37B | 5.76B | 4.90B |
| Net Income | 6.25B | 6.04B | 5.73B | 4.21B | 3.59B |
Balance Sheet | |||||
| Total Assets | 42.62B | 41.49B | 31.50B | 28.13B | 23.93B |
| Cash, Cash Equivalents and Short-Term Investments | 7.28B | 8.00B | 7.08B | 4.98B | 3.22B |
| Total Debt | 6.06B | 4.42B | 3.39B | 4.01B | 2.11B |
| Total Liabilities | 24.08B | 18.36B | 13.64B | 12.89B | 9.92B |
| Stockholders Equity | 17.41B | 22.20B | 17.34B | 14.83B | 13.60B |
Cash Flow | |||||
| Free Cash Flow | 3.81B | 5.40B | 5.36B | 1.81B | 92.04M |
| Operating Cash Flow | 6.32B | 7.25B | 7.02B | 2.98B | 939.38M |
| Investing Cash Flow | -2.85B | -4.09B | -1.71B | -1.35B | -683.87M |
| Financing Cash Flow | -4.28B | -2.76B | -2.96B | 191.91M | -1.44B |
WEG Technical Analysis
Positive
8.49
Price Trends
9.54
Positive
9.01
Positive
7.96
Positive
Market Momentum
0.07
Negative
59.94
Neutral
94.61
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For WEGZY, the sentiment is Positive. The current price of 8.49 is below the 20-day moving average (MA) of 9.09, below the 50-day MA of 9.54, and above the 200-day MA of 7.96, indicating a bullish trend. The MACD of 0.07 indicates Negative momentum. The RSI at 59.94 is Neutral, neither overbought nor oversold. The STOCH value of 94.61 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for WEGZY.
WEG Peers Comparison
UnderperformOutperform
Sector (63)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
75 Outperform | $27.70B | 24.49 | 14.76% | 1.04% | -5.24% | 45.69% | |
70 Outperform | $30.51B | 54.24 | 5.70% | 0.10% | 4.20% | -34.47% | |
68 Neutral | $14.01B | 25.61 | 17.48% | 0.96% | 0.83% | -1.32% | |
68 Neutral | $41.01B | 35.94 | 27.69% | 1.33% | 0.98% | -7.51% | |
66 Neutral | $40.91B | 33.23 | 30.61% | 1.85% | 5.17% | -3.66% | |
64 Neutral | $30.27B | 24.85 | -25.98% | 1.88% | 0.73% | -15.57% | |
63 Neutral | $10.79B | 15.43 | 7.44% | 2.01% | 2.89% | -14.66% |
* Industrials Sector Average
WEGZY
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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.