Honda Motor Company (HMC) AI Stock Analysis

• Market Cap: $41.57B
• Dividend Yield: 4.43%
• Average Volume (3M): 806.94K
• Price to Earnings (P/E): 11.0
• Beta (1Y): 0.61
• Revenue Growth: 1.68%
• EPS Growth: -39.28%
• Country: US
• Employees: 194,993
• Sector: Consumer Cyclical
• Sector Strength: 84
• Industry: Auto - Manufacturers
• EPS (TTM): 46.80
• Shares Outstanding: 1,760,000,000
• 10 Day Avg. Volume: 1,080,067
• 30 Day Avg. Volume: 806,941
• PEG Ratio: -0.12
• Price to Book (P/B): 0.17
• Price to Sales (P/S): 0.10
• P/FCF Ratio: -3.80
• Enterprise Value/Market Cap: 2.16
• Enterprise Value/Revenue: <0.01
• Enterprise Value/Gross Profit: 0.02
• Enterprise Value/Ebitda: 0.05
• 1Y Price Target: $33.00
• Price Target Upside: 5.20% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 0

• Rating: 66 Neutral
• Price Target: $33.00 ▲(5.20% Upside)

Honda Motor Company's overall stock score reflects a balance of strong financial performance and attractive valuation against technical challenges and mixed earnings call outcomes. The company's robust profitability and reasonable valuation are offset by bearish technical indicators and operational challenges in the automobile segment.

Honda Motor Company Business Overview & Revenue Model

Company Description

Honda Motor Company (HMC) is a multinational conglomerate primarily engaged in the manufacturing of automobiles, motorcycles, and power equipment. Founded in 1948 in Japan, Honda has established itself as one of the world's largest automotive manufacturers, with a diverse product lineup that includes passenger cars, commercial vehicles, and various types of motorcycles. The company is also active in the development of advanced technologies, including fuel cell vehicles and robotics, and has a growing presence in the power sports and marine sectors.

How the Company Makes Money

Honda generates revenue primarily through the sale of its automotive and motorcycle products. The company's automotive division contributes a significant portion of its earnings, offering a wide range of vehicles from compact cars to SUVs and luxury models under the Acura brand. Additionally, Honda's motorcycle division is a leading player in the global market, providing a variety of motorcycles for different segments, including sport bikes and scooters. Other key revenue streams include sales of power equipment, such as generators and lawn mowers, as well as revenue from financing and leasing services offered through Honda Financial Services. Strategic partnerships with technology firms and investments in research and development further enhance Honda's competitive edge, allowing the company to innovate and diversify its offerings, which in turn drives sales and profitability.

Honda Motor Company Financial Statement Overview

Summary

Honda Motor Company exhibits strong financial health with consistent income growth and solid balance sheet metrics. While profitability remains high, and leverage is managed well, cash flow volatility and rising liabilities present areas for improvement. The company is well-positioned in the auto manufacturing industry, but it must address cash flow management to sustain long-term growth.

Income Statement

Honda Motor Company has shown consistent revenue growth over the years, with a notable increase from 2021 to 2025. The gross profit margin and net profit margin remained stable, showcasing efficient cost management. Despite a slight decline in EBIT margin in 2025, the EBITDA margin indicates strong operational performance. Overall, the company demonstrates robust income-generating capability with healthy profitability.

Balance Sheet

Honda's balance sheet reflects a strong equity position, with the equity ratio showing a solid percentage of total assets funded by shareholders' equity. The debt-to-equity ratio has decreased over time, indicating improved leverage management. Return on equity is steady, reflecting efficient utilization of shareholder funds. However, there is a potential risk from total liabilities, which have increased alongside assets, suggesting a need for cautious financial management.

Cash Flow

The cash flow analysis shows volatility in free cash flow, with a significant decline in 2025 due to increased capital expenditures. Operating cash flow remains positive but has decreased compared to previous years. The operating cash flow to net income ratio indicates effective cash generation relative to net income, though the decreasing trend suggests potential cash flow challenges. Overall, Honda's cash flow management is satisfactory but requires attention to maintain stability.

Breakdown	TTM	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	21.62T	21.69T	20.43T	16.91T	14.55T	13.17T
Gross Profit	4.54T	4.66T	4.26T	3.33T	2.98T	2.73T
EBITDA	1.84T	2.12T	3.17T	1.50T	2.36T	2.08T
Net Income	637.85B	835.84B	1.11T	651.42B	707.07B	657.42B
Balance Sheet
Total Assets	29.87T	30.78T	29.77T	24.67T	23.97T	21.92T
Cash, Cash Equivalents and Short-Term Investments	4.17T	4.74T	5.18T	4.07T	3.89T	3.05T
Total Debt	0.00	4.42T	10.08T	7.67T	8.05T	7.72T
Total Liabilities	17.81T	18.15T	16.77T	13.12T	13.20T	12.55T
Stockholders Equity	11.80T	12.33T	12.70T	11.23T	10.47T	9.08T
Cash Flow
Free Cash Flow	-307.39B	-555.28B	138.61B	1.50T	1.23T	521.24B
Operating Cash Flow	459.07B	292.15B	747.28B	2.13T	1.68T	1.07T
Investing Cash Flow	-959.45B	-941.97B	-867.27B	-678.06B	-376.06B	-796.88B
Financing Cash Flow	-126.59B	280.48B	918.65B	-1.47T	-615.72B	-283.98B

Honda Motor Company Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 31.37
• 50DMA: Negative
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For HMC, the sentiment is Positive. The current price of 31.37 is below the 20-day moving average (MA) of 32.51, below the 50-day MA of 32.55, and above the 200-day MA of 29.20, indicating a neutral trend. The MACD of -0.41 indicates Positive momentum. The RSI at 46.30 is Neutral, neither overbought nor oversold. The STOCH value of 24.81 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for HMC.

Honda Motor Company Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
TM	83 Outperform	$246.99B	8.97	12.05%	2.78%	4.14%	-12.12%
TSLA	76 Outperform	$1.43T	248.92	8.43%	―	-2.73%	-51.64%
GM	75 Outperform	$57.25B	9.53	7.07%	0.90%	5.34%	-28.29%
F	73 Outperform	$50.42B	16.16	7.11%	5.91%	2.72%	-17.58%
LI	68 Neutral	$25.84B	23.54	11.91%	―	7.49%	-21.06%
HMC	66 Neutral	$41.57B	11.02	5.17%	4.43%	1.68%	-39.28%
Sector *	61 Neutral	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%

Honda Motor Company Corporate Events

Honda Motor Co. Updates Corporate Governance Structure for Enhanced Transparency

On July 15, 2025, Honda Motor Co., Ltd. announced updates to its corporate governance structure, emphasizing transparency and strategic management. The company has implemented a three-committee system to enhance decision-making and oversight, aiming to strengthen shareholder trust and ensure sustainable growth. Honda’s initiatives include a Global Succession Plan for talent development and a focus on sustainability, reflecting its commitment to long-term corporate value enhancement.

Honda Motor Co. Issues New Senior Notes to Strengthen Financial Position

On July 2, 2025, Honda Motor Co., Ltd. announced the issuance of senior notes with varying interest rates, due in 2028, 2030, and 2035. This strategic financial move is aimed at bolstering the company’s capital structure and supporting its long-term growth objectives. The issuance of these notes is expected to enhance Honda’s financial flexibility and strengthen its position in the competitive automotive industry.