Honda Motor Company (HMC) AI Stock Analysis

• Market Cap: $43.30B
• Dividend Yield: 4.39%
• Average Volume (3M): 864.71K
• Price to Earnings (P/E): 11.1
• Beta (1Y): 0.63
• Revenue Growth: 1.68%
• EPS Growth: -39.28%
• Country: US
• Employees: 194,993
• Sector: Consumer Cyclical
• Sector Strength: 84
• Industry: Auto - Manufacturers
• EPS (TTM): 0.95
• Shares Outstanding: 1,760,000,000
• 10 Day Avg. Volume: 778,383
• 30 Day Avg. Volume: 864,712
• 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: 2.18
• Enterprise Value/Revenue: <0.01
• Enterprise Value/Gross Profit: 0.02
• Enterprise Value/Ebitda: 0.05
• 1Y Price Target: N/A
• Price Target Upside: N/A
• Rating Consensus: N/A
• Number of Analyst Covering: 0

• Rating: 71 Outperform
• Price Target: $35.00 ▲(11.89% Upside)

Honda Motor Company's overall stock score is driven by strong financial performance and attractive valuation metrics. The company's consistent income growth and solid balance sheet are significant strengths. However, technical analysis indicates potential short-term weakness, and challenges highlighted in the earnings call, such as declining operating profits and automobile segment losses, weigh on the score.

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: 31.28
• 50DMA: Negative
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

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 31.28 is above the 20-day moving average (MA) of 31.12, below the 50-day MA of 32.38, and above the 200-day MA of 29.53, indicating a neutral trend. The MACD of -0.27 indicates Negative momentum. The RSI at 50.74 is Neutral, neither overbought nor oversold. The STOCH value of 90.20 is Negative, 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
TSLA	75 Outperform	$1.47T	254.21	7.03%	―	-2.73%	-51.64%
F	73 Outperform	$49.99B	16.02	7.11%	6.03%	2.72%	-17.58%
HMC	71 Outperform	$43.30B	11.09	5.17%	4.39%	1.68%	-39.28%
GM	71 Outperform	$63.43B	13.39	4.44%	0.93%	2.58%	-46.27%
TM	70 Outperform	$256.96B	9.31	12.05%	2.98%	4.14%	-12.12%
LI	65 Neutral	$22.51B	20.75	11.91%	―	7.49%	-21.06%
Sector *	61 Neutral	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%

Honda Motor Company Corporate Events

Honda Motors’ Earnings Call: Mixed Sentiments and Challenges

Honda Motors’ recent earnings call presented a mixed sentiment, with notable achievements in the motorcycle segment and revised profit forecasts being overshadowed by significant declines in operating profit, tariff impacts, and losses in the automobile segment. The challenges faced in China and other regions further contributed to a negative outlook for the company.

Honda Motors Reports Decline in Quarterly Earnings

Honda Motor Co., Ltd. is a leading global manufacturer in the automotive and motorcycle industries, known for its innovative engineering and diverse product lineup, including automobiles, motorcycles, and power equipment.