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HMS Networks AB
(HMS)
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Rating:64Neutral
Price Target:
kr518.00
▲(29.11% Upside)
Action:Reiterated
Date:07/15/26
The score is supported primarily by strong profitability and robust free cash flow, reinforced by a generally positive earnings update and margin guidance remaining above target. It is held back by weak near-term technical momentum and a rich valuation (high P/E with a low dividend yield), alongside balance-sheet complexity from the post-2023 expansion and guidance for some margin pressure in H2.
Positive Factors
Free Cash Flow Strength
Consistently strong FCF provides durable financial flexibility: it funds dividends, debt reduction, M&A and R&D without relying on external financing. High cash conversion in the trailing period cushions the business through demand swings and supports long-term capital allocation priorities.
Negative Factors
Supply-Chain & Component Cost Pressure
Rising memory prices and extended lead times create structural margin risk and force higher inventory holdings. Locking supply by tying up working capital reduces near-term cash flexibility and can compress gross margins when replenishment occurs at elevated component costs.
Read all positive and negative factors
Positive Factors
Negative Factors
Free Cash Flow Strength
Consistently strong FCF provides durable financial flexibility: it funds dividends, debt reduction, M&A and R&D without relying on external financing. High cash conversion in the trailing period cushions the business through demand swings and supports long-term capital allocation priorities.
Read all positive factors
HMS Networks AB (HMS) vs. iShares MSCI Sweden ETF (EWD)
Market Cap
kr24.11B
Dividend YieldN/A
Average Volume (3M)28.58K
Price to Earnings (P/E)43.7
Beta (1Y)1.01
Revenue Growth14.26%
EPS Growth49.83%
CountrySE
Employees1,100
SectorTechnology
Sector Strength88
IndustryCommunication Equipment
Share Statistics
EPS (TTM)11.03
Shares Outstanding50,318,867
10 Day Avg. Volume37,917
30 Day Avg. Volume28,579
Financial Highlights & Ratios
PEG Ratio1.32
Price to Book (P/B)6.05
Price to Sales (P/S)5.88
P/FCF Ratio25.80
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
kr555.00Price Target Upside38.33% Upside
Rating ConsensusHold
Number of Analyst Covering1
EPS Forecast (FY)15.01
Revenue Forecast (FY)kr4.03B
HMS Networks AB Business Overview & Revenue Model
Company Description
HMS Networks AB (publ), a Swedish company founded in Halmstad in 1988, is a global leader in providing sophisticated industrial communication and Industrial Internet of Things (IIoT) solutions. The company's extensive product lineup is offered wor...
How the Company Makes Money
HMS primarily makes money by selling industrial connectivity products and related software/services to OEMs, system integrators, distributors, and end users. Key revenue streams include: (1) Hardware product sales: a significant portion of revenue...
HMS Networks AB Earnings Call Summary
Earnings Call Date:Jul 14, 2026
(Q2-2026)
| % Change Since: |
Next Earnings Date:Oct 21, 2026
Earnings Call Sentiment Positive
The call presented a strong quarter with record EBITDA, high operating cash flow, double-digit organic growth, broad regional strength (notably APAC +35% and Americas +28% sales growth in the period), and solid division performance (I&T and IDS). Key strategic moves (Ekkono investment, product launches) and sustainability recognition reinforce the positive outlook. The main cautions relate to supply-chain constraints (longer lead times and rising memory prices), expected gross-margin normalization in H2, plans to rebuild inventory, and some segment-specific softness. Overall these risks are acknowledged and manageable against strong financial and operational momentum reported for the quarter.Positive Updates
Net Sales and Growth
Net sales SEK 991 million in Q2 2026, organic growth +12% and total growth +18% (including M&A and favorable currency). Company approaching SEK 1,000 million quarterly run-rate.
Negative Updates
Supply-Chain Pressure on Components
Longer lead times and rising prices for memory and other semiconductor components; management flags potential margin pressure in H2 when inventories are replenished at higher prices.
Read all updates
Q2-2026 Updates
Positive
Negative
Net Sales and Growth
Net sales SEK 991 million in Q2 2026, organic growth +12% and total growth +18% (including M&A and favorable currency). Company approaching SEK 1,000 million quarterly run-rate.
Read all positive updates
Company Guidance
The company guided that Q2’s strong metrics (net sales SEK 991m, EBITDA SEK 266m, EBITDA margin 26.8% / YTD 27%, gross margin 63.8%, operating cash flow SEK 334m in Q2 / SEK 584m YTD, EPS SEK 3.65) set a base for the year but warned of near‑term headwinds: Q2 gross margin is “about 1 percentage point elevated” from mix and they expect another ~1pp potential drag from semiconductor/memory price and lead‑time pressure in H2, so gross margin should remain north of ~62% but not necessarily above 63%; EBITDA margin is expected to stay above the 25% target. They expect book‑to‑bill around 1.0, an OpEx run‑rate similar to Q2 (OpEx organic +9%; capitalized R&D SEK 27m in Q2 and expected at similar levels), no major extra investment ramp for 2026, plans to tie up more inventory to secure memory allocations, continuing M&A dialogue, and net debt of SEK 2.26bn (after SEK 241m dividend) with net debt/EBITDA ~1.74x pre‑IFRS16.HMS Networks AB Financial Statement Overview
Summary
Income Statement
78
Positive
Balance Sheet
62
Positive
Cash Flow
81
Very Positive
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 3.81B | 3.58B | 3.06B | 3.02B | 2.51B | 1.97B |
| Gross Profit | 2.41B | 2.25B | 1.92B | 1.97B | 1.58B | 1.23B |
| EBITDA | 1.21B | 1.03B | 703.15M | 854.88M | 740.44M | 554.26M |
| Net Income | 553.00M | 435.00M | 309.68M | 570.64M | 507.79M | 354.85M |
Balance Sheet | ||||||
| Total Assets | 6.80B | 6.60B | 7.50B | 3.01B | 2.73B | 2.20B |
| Cash, Cash Equivalents and Short-Term Investments | 47.00M | 89.00M | 73.93M | 124.03M | 144.17M | 172.17M |
| Total Debt | 2.19B | 2.43B | 3.16B | 267.38M | 298.59M | 84.14M |
| Total Liabilities | 3.11B | 3.12B | 3.99B | 1.08B | 1.12B | 1.03B |
| Stockholders Equity | 3.70B | 3.48B | 3.50B | 1.93B | 1.61B | 1.18B |
Cash Flow | ||||||
| Free Cash Flow | 934.00M | 815.00M | 471.00M | 445.00M | 348.06M | 469.30M |
| Operating Cash Flow | 1.07B | 878.00M | 592.02M | 518.86M | 431.11M | 508.49M |
| Investing Cash Flow | -216.00M | -135.00M | -4.45B | -135.12M | -365.93M | -100.04M |
| Financing Cash Flow | -871.00M | -715.00M | 3.83B | -400.23M | -98.96M | -320.86M |
HMS Networks AB Technical Analysis
Negative
401.20
Price Trends
526.71
Negative
485.50
Negative
461.82
Positive
Market Momentum
-10.51
Positive
40.68
Neutral
25.51
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SE:HMS, the sentiment is Negative. The current price of 401.2 is below the 20-day moving average (MA) of 495.21, below the 50-day MA of 526.71, and below the 200-day MA of 461.82, indicating a neutral trend. The MACD of -10.51 indicates Positive momentum. The RSI at 40.68 is Neutral, neither overbought nor oversold. The STOCH value of 25.51 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for SE:HMS.
HMS Networks AB Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
69 Neutral | kr5.18B | 32.01 | 9.68% | 1.11% | 10.48% | 22.01% | |
64 Neutral | kr24.11B | 43.74 | 12.76% | ― | 14.26% | 49.83% | |
61 Neutral | $37.18B | 12.37 | -10.20% | 1.83% | 8.50% | -7.62% | |
60 Neutral | kr9.56B | 44.65 | 21.88% | 0.87% | 12.36% | -2.60% | |
56 Neutral | kr10.03B | -1,513.33 | 3.38% | ― | 4.60% | -89.25% | |
53 Neutral | kr802.15M | 149.69 | -1.21% | ― | -14.51% | -1025.00% | |
49 Neutral | kr298.00M | -13.61 | -5.81% | ― | -8.58% | -159.42% |
* Technology Sector Average
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HMS Networks AB Corporate Events
HMS Networks Delivers Record Quarter and Expands AI-Driven Industrial Offerings
Jul 14, 2026
HMS Networks reported another record quarter with strong profitable growth, driven by robust demand from data center and semiconductor-related investments and broad-based double-digit expansion across all regions, led by APAC. Second-quarter order...
HMS Networks Schedules Q2 2026 Report and Investor Conference Call
Jul 6, 2026
HMS Networks AB, a leading player in Industrial Information and Communication Technology, provides connectivity and communication solutions that help industrial customers integrate and monitor equipment and systems. With more than 1,100 employees,...
HMS Networks AGM Backs Dividend, New Share Issue Mandate and Long-Term Incentive Plan
Apr 23, 2026
HMS Networks AB’s annual general meeting approved all proposals from the board and nomination committee, including a dividend of SEK 4.80 per share and the adoption of the 2025 financial statements with discharge from liability for the board...
HMS Networks posts record quarter as Molex acquisition boosts growth
Apr 23, 2026
HMS Networks reported a strong first quarter of 2026, with order intake rising 19% to SEK 1,108 million and net sales up 9% to a record SEK 971 million, driven by 15% organic sales growth and broad-based demand across all divisions and regions. Pr...
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.