Hexagon AB (HXGBY) AI Stock Analysis

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Hexagon AB

(OTC:HXGBY)

Rating:74Outperform

Price Target:

$11.50

▲( 14.31% Upside)

Hexagon AB's overall stock score reflects its strong financial performance and balanced technical analysis despite valuation concerns. The cautious sentiment from the earnings call due to geopolitical and tariff challenges tempers the score. Notable strengths include revenue growth, strategic initiatives, and effective cash management, which support a stable outlook.

Hexagon AB (HXGBY) vs. SPDR S&P 500 ETF (SPY)

Market Cap

$26.71B

Dividend Yield0.81%

Average Volume (3M)169.35K

Price to Earnings (P/E)25.5

Beta (1Y)0.95

Revenue Growth-1.47%

EPS Growth13.50%

CountryUS

Employees25,091

SectorTechnology

Sector Strength77

IndustryHardware, Equipment & Parts

Share Statistics

EPS (TTM)0.11

Shares Outstanding2,595,227,800

10 Day Avg. Volume20,113

30 Day Avg. Volume169,349

Financial Highlights & Ratios

PEG Ratio-4.45

Price to Book (P/B)2.09

Price to Sales (P/S)0.00

P/FCF Ratio22.88

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price TargetN/A

Price Target UpsideN/A

Rating ConsensusN/A

Number of Analyst Covering0

Hexagon AB Business Overview & Revenue Model

Company DescriptionHexagon AB is a global leader in digital reality solutions, combining sensor, software, and autonomous technologies. The company operates primarily in two sectors: Geospatial Enterprise Solutions and Industrial Enterprise Solutions. Hexagon's core products and services include a wide range of hardware and software solutions for industries such as surveying, construction, public safety, and manufacturing. These offerings enable customers to improve productivity, quality, and efficiency through the integration of data and technology.

How the Company Makes MoneyHexagon AB generates revenue through the sale of its comprehensive suite of products and services across various industries. The company's primary revenue streams include the sale of hardware products, such as sensors and measurement instruments, and software licenses for design, measurement, and data management solutions. Additionally, Hexagon offers subscription-based services and maintenance contracts that provide ongoing support and updates for its software products. The company also engages in strategic partnerships and collaborations to enhance its offerings and expand its market reach. Significant factors contributing to its earnings include the increasing demand for digital transformation solutions and the adoption of autonomous technologies across different sectors.

Hexagon AB Financial Statement Overview

Summary

Hexagon AB exhibits strong financial health with consistent revenue growth and robust profitability margins. The balance sheet's low leverage and high equity base provide stability, while the cash flow statement highlights effective cash management. While there are minor pressures on net income margins and room for improvement in ROE, the overall financial position is solid, underscoring Hexagon's capability to sustain growth and manage risks effectively.

Income Statement

Very Positive

Hexagon AB demonstrated robust revenue growth, with a TTM revenue of approximately $5.44 billion, showcasing a steady upward trajectory. The gross profit margin stands at 67.06%, indicating strong profitability. However, the EBIT margin of 25.14% and the slight decline in net profit margin to 17.93% from the previous annual report suggest some pressure on operating efficiency. Nonetheless, the consistent EBITDA margin of 36.03% reflects stable operational performance.

Balance Sheet

Positive

The company maintains a solid balance sheet with a debt-to-equity ratio of 0.37, indicating prudent leverage management. The equity ratio of 61.67% underscores a strong equity base relative to assets, enhancing financial stability. The return on equity (ROE) is 8.90%, which, while positive, suggests room for improvement in generating shareholder value. Overall, the balance sheet reflects stability and low financial risk.

Cash Flow

Positive

Hexagon AB's free cash flow growth is commendable, with a TTM free cash flow of approximately $991.9 million. The operating cash flow to net income ratio of 1.67 indicates efficient cash generation relative to net income. However, the free cash flow to net income ratio is slightly lower at 1.02, suggesting that capital expenditures are impacting cash flow. Despite this, the cash flow statement reflects a healthy cash position and effective cash management.

TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
5.44B	5.40B	5.44B	5.16B	4.34B	3.76B
	Gross Profit
3.64B	3.61B	3.54B	3.36B	2.80B	2.37B
	EBIT
1.37B	1.43B	1.22B	1.29B	1.01B	787.00M
	EBITDA
1.96B	2.01B	1.78B	1.75B	1.58B	1.32B
	Net Income Common Stockholders
974.70M	1.02B	858.90M	1.01B	801.60M	618.10M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
549.00M	663.80M	547.10M	486.30M	472.10M	397.40M
	Total Assets
17.76B	17.85B	16.88B	16.48B	14.10B	10.70B
	Total Debt
4.04B	3.83B	4.08B	3.87B	2.94B	2.65B
	Net Debt
3.49B	3.32B	3.67B	3.48B	2.51B	2.32B
	Total Liabilities
6.77B	6.65B	6.84B	6.61B	5.33B	4.75B
	Stockholders Equity
10.95B	11.16B	10.01B	9.83B	8.73B	5.93B
Cash Flow		Free Cash Flow
991.90M	955.90M	743.80M	763.30M	898.70M	909.90M
	Operating Cash Flow
1.62B	1.59B	1.37B	1.33B	1.32B	1.30B
	Investing Cash Flow
-1.23B	-710.10M	-1.03B	-1.80B	-1.17B	-1.18B
	Financing Cash Flow
-343.53M	-764.10M	-249.30M	493.30M	-86.50M	-188.70M

Hexagon AB Technical Analysis

Technical Analysis Sentiment

Positive

Last Price10.06

Price Trends

50DMA

9.96

Positive

100DMA

10.42

Negative

200DMA

9.99

Positive

Market Momentum

MACD

0.09

Negative

RSI

54.08

Neutral

STOCH

35.37

Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For HXGBY, the sentiment is Positive. The current price of 10.06 is above the 20-day moving average (MA) of 9.83, above the 50-day MA of 9.96, and above the 200-day MA of 9.99, indicating a bullish trend. The MACD of 0.09 indicates Negative momentum. The RSI at 54.08 is Neutral, neither overbought nor oversold. The STOCH value of 35.37 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for HXGBY.

Hexagon AB Peers Comparison

Overall Rating

UnderperformOutperform

Sector (61)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
KEYS	78 Outperform	$27.95B	37.95	14.30%	―	-1.16%	-7.04%
TDY	77 Outperform	$22.87B	27.90	8.61%	―	2.98%	-5.64%
TRMB	77 Outperform	$16.89B	11.53	31.00%	―	-6.93%	537.94%
HXGBY	74 Outperform	$26.71B	25.47	9.07%	0.81%	-1.47%	13.50%
FTV	72 Outperform	$23.84B	30.80	7.70%	0.46%	0.85%	-10.01%
MKSI	71 Outperform	$5.69B	25.30	9.50%	1.04%	-1.14%	―
Sector *	61 Neutral	$11.29B	10.07	-7.05%	2.96%	7.47%	-10.75%

* Technology Sector Average

Performance Comparison

HXGBY

Hexagon AB

10.06

-0.86

-7.88%

MKSI

MKS Instruments

83.82

-46.42

-35.64%

TDY

Teledyne Technologies

486.22

83.73

20.80%

TRMB

Trimble

70.55

13.75

24.21%

KEYS

Keysight Technologies

160.03

15.98

11.09%

FTV

Fortive

69.67

-5.90

-7.81%

Hexagon AB Earnings Call Summary

Earnings Call Date:Apr 30, 2025

(Q1-2025)

% Change Since: 6.91%|

Next Earnings Date:Jul 25, 2025

Earnings Call Sentiment Neutral

The earnings call presented a mixed outlook. While there was strong recurring revenue growth and progress in strategic initiatives, the quarter was significantly impacted by geopolitical uncertainties and tariff issues, leading to revenue and margin challenges. The sentiment is cautious, with a focus on cost management and adjustments in response to market conditions.

Q1-2025 Updates

Positive Updates

Strong Recurring Revenue Growth

Recurring revenue grew strongly by 10%, showcasing a solid performance in subscription software and recurring revenues across various divisions.

Progress in Strategic Initiatives

The preparations to separate the ALI division are on track, including the inclusion of the SIG division, and the launch of a new Robotics division focusing on humanoid robotics.

Gross Margin Improvement

Gross margins improved to 67.2%, driven by strong performance in the software portfolio.

Negative Updates

Geopolitical Uncertainty Impact

Geopolitical uncertainties, especially tariffs, significantly impacted March revenues, resulting in a 6% decline and affecting the operating margin.

Manufacturing Intelligence Revenue Decline

Manufacturing Intelligence reported a 2% organic decline in revenues, with high single-digit declines in March due to customer decision-making delays and currency headwinds.

Weakness in Sensor Business

Weakness in the sensor business and a slowdown in perpetual software licenses offset the good momentum in recurring revenues.

Negative Currency Impact

Currency transaction headwinds contributed to a decrease in EBIT margin, with a €6.9 million negative impact from currency transactions.

Company Guidance

During the Hexagon Q1 2025 conference call, the company reported 0% organic growth, 67% gross margins, and an operating margin of 26%, with a cash conversion rate of 71%. Recurring revenue grew by 10%. The company faced challenges in March due to geopolitical uncertainties affecting revenue volumes, particularly in Canada, Mexico, China, and Western Europe due to increased US tariffs. March, which accounts for 50% of Q1 revenue, saw a 6% decline. Despite the challenges, demand stabilized in April. The company is preparing to separate its ALI division and has launched a new Robotics division focusing on humanoid robotics. Hexagon is taking steps to mitigate tariff impacts, including rerouting shipping, alternative sourcing, and strategic inventory management.

Glossary

OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.

NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.

UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

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.