IAR Systems Group AB (IAR.B) AI Stock Analysis

• Market Cap: kr2.26B
• Dividend Yield: 0.84%
• Average Volume (3M): 29.84K
• Price to Earnings (P/E): 32.5
• Beta (1Y): 0.72
• Revenue Growth: -1.48%
• EPS Growth: N/A
• Country: SE
• Employees: 227
• Sector: Technology
• Sector Strength: 88
• Industry: Software - Application
• EPS (TTM): 0.16
• Shares Outstanding: 13,060,291
• 10 Day Avg. Volume: 19,586
• 30 Day Avg. Volume: 29,840
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: kr189.00
• Price Target Upside: 6.06% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 0

• Rating: 62 Neutral
• Price Target: kr189.00 ▲(6.06% Upside)

The overall stock score of 62 reflects a stable financial position with strong profitability and low leverage, but concerns about revenue growth and cash flow conversion. The technical analysis indicates a bullish trend, though the stock appears overbought. Valuation metrics suggest the stock may be overvalued, with a high P/E ratio and modest dividend yield.

IAR Systems Group AB Business Overview & Revenue Model

Company Description

IAR Systems Group AB (publ) provides software tools and services for embedded systems development in Sweden. The company offers IAR Embedded Workbench, a development toolchain for embedded software and arm technology. It also provides RISC-V, a specialist product for embedded development; renesas, a development tool for microcontrollers; NXP, a developing application for microcontrollers, as well as offers nuvoton technology, a smart home and cloud security integrated circuit. In addition, the company provides texas instruments such as wireless microcontrollers, and microprocessors; microelectronics and microchips. The company serves automotive, industrial automation, internet of things, medical, and consumer electronics industries. IAR Systems Group AB (publ) was founded in 1983 and is headquartered in Uppsala, Sweden.

How the Company Makes Money

IAR Systems generates revenue primarily through the sale of its software development tools, which are offered under various licensing models including perpetual and subscription licenses. The company earns significant income from maintenance and support services provided to its customers, ensuring ongoing updates and technical assistance. Additionally, IAR Systems has formed strategic partnerships and collaborations with hardware manufacturers and technology firms, which help expand its market reach and enhance its product offerings. These partnerships often lead to bundled solutions that combine IAR's tools with third-party hardware, creating new revenue opportunities. The company also benefits from a growing demand for embedded systems across various sectors, contributing to its overall sales growth.

IAR Systems Group AB Financial Statement Overview

Summary

IAR Systems Group AB demonstrates a stable financial position with strong profitability and low leverage. The income statement shows a mixed performance with declining revenue growth but healthy margins. The balance sheet is strong with low debt and good ROE. Cash flow is positive but has room for improvement in conversion efficiency.

Income Statement

The income statement shows a mixed performance. The TTM data indicates a decline in revenue growth rate by -2.83%, which is concerning. However, the company maintains a healthy EBIT margin of 23.89% and a net profit margin of 17.36%, indicating profitability. Historical data shows fluctuating revenue growth and margins, with a significant improvement in net profit margin from negative in 2023 to positive in 2024.

Balance Sheet

The balance sheet is strong with a low debt-to-equity ratio of 0.076, indicating low leverage and financial stability. The return on equity (ROE) is 18.90% for TTM, which is a positive indicator of profitability. The equity ratio is not directly provided, but the low debt levels suggest a solid equity position.

Cash Flow

Cash flow analysis shows a positive trend with a 9.08% growth in free cash flow in the TTM period. The operating cash flow to net income ratio is 0.71, indicating good cash generation relative to net income. However, the free cash flow to net income ratio of 0.55 suggests room for improvement in converting income to free cash flow.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	477.60M	487.20M	458.10M	419.90M	355.90M	372.00M
Gross Profit	208.40M	232.30M	202.20M	457.30M	343.90M	357.90M
EBITDA	147.80M	182.40M	-173.00M	109.80M	-40.40M	105.80M
Net Income	71.50M	135.20M	-229.00M	57.80M	-67.40M	59.40M
Balance Sheet
Total Assets	683.90M	724.20M	700.00M	922.20M	812.80M	833.50M
Cash, Cash Equivalents and Short-Term Investments	131.10M	155.40M	197.40M	148.20M	113.40M	67.80M
Total Debt	30.60M	44.90M	51.70M	69.30M	56.00M	66.30M
Total Liabilities	248.00M	261.70M	276.60M	255.40M	227.50M	220.10M
Stockholders Equity	435.90M	462.50M	423.40M	666.80M	585.30M	613.40M
Cash Flow
Free Cash Flow	92.50M	80.90M	102.00M	-1.70M	57.50M	37.00M
Operating Cash Flow	132.70M	135.40M	144.10M	57.80M	131.60M	118.40M
Investing Cash Flow	-55.40M	-54.50M	-41.80M	-59.50M	-74.10M	-81.40M
Financing Cash Flow	-102.40M	-125.40M	-49.20M	-39.50M	-15.10M	-24.60M

IAR Systems Group AB Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 178.20
• 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 SE:IAR.B, the sentiment is Positive. The current price of 178.2 is above the 20-day moving average (MA) of 178.08, below the 50-day MA of 178.28, and above the 200-day MA of 139.96, indicating a neutral trend. The MACD of 0.10 indicates Positive momentum. The RSI at 54.23 is Neutral, neither overbought nor oversold. The STOCH value of 75.73 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for SE:IAR.B.

IAR Systems Group AB Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
ENEA	65 Neutral	kr1.62B	21.61	―	―	1.38%	-5.29%
IAR.B	62 Neutral	kr2.26B	32.49	16.31%	0.84%	-1.48%	―
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
LIME	61 Neutral	€4.36B	43.73	33.21%	1.18%	12.88%	16.11%
FPIP	61 Neutral	kr1.51B	119.88	―	1.80%	6.08%	-66.50%
SEYE	54 Neutral	kr3.09B	―	―	―	4.86%	-513.15%
CINT	46 Neutral	€2.00B	30.20	1.38%	―	-26.59%	―

IAR Systems Group AB Corporate Events

IAR Systems Board Endorses Qt Company’s Acquisition Offer

The board of directors of IAR Systems Group AB has unanimously recommended that shareholders accept a public cash offer from The Qt Company Ltd, a subsidiary of Qt Group Plc, valuing IAR at approximately SEK 2,293 million. The offer represents a significant premium over recent trading prices and is part of IAR’s strategic shift towards a cloud-enabled platform model, aiming to expand its market reach and achieve ambitious financial targets. Key shareholders have already expressed their support, and the offer is conditional upon regulatory approvals and achieving a 90% shareholding.

IAR Systems Group AB Adjusts Share Capital Structure

IAR Systems Group AB announced a change in its total number of shares and votes as of June 30, 2025, following a reduction and subsequent restoration of share capital. The Annual General Meeting resolved to cancel 600,000 series B shares, reducing the share capital by SEK 6,000,000.190288, and simultaneously approved a bonus issue to restore the capital without issuing new shares. This strategic move reflects the company’s efforts to optimize its capital structure.

IAR Systems Adjusts Q1 2025 ARR for Accurate Financial Reporting

IAR Systems Group AB has corrected its reported Annual Recurring Revenue (ARR) for Q1 2025 from 53% to 59% due to an understatement in revenues from Support and Update services during its transition from a Perpetual to a Subscription business model. This adjustment ensures accurate financial disclosures without affecting the total net sales, reflecting the company’s commitment to transparency and precision in its financial reporting.