Volvo AB (VOLV.A) AI Stock Analysis

• Market Cap: kr532.50B
• Dividend Yield: 3.1%
• Average Volume (3M): 134.65K
• Price to Earnings (P/E): 14.9
• Beta (1Y): 1.42
• Revenue Growth: -7.96%
• EPS Growth: -31.18%
• Country: SE
• Employees: 91,154
• Sector: Industrials
• Sector Strength: 72
• Industry: Agricultural - Machinery
• EPS (TTM): 3.71
• Shares Outstanding: 444,498,750
• 10 Day Avg. Volume: 166,120
• 30 Day Avg. Volume: 134,648
• PEG Ratio: 9.54
• Price to Book (P/B): 2.83
• Price to Sales (P/S): 1.04
• P/FCF Ratio: 19.58
• 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: N/A
• Price Target Upside: N/A
• Rating Consensus: Hold
• Number of Analyst Covering: 0

• Rating: 60 Neutral
• Price Target: kr261.00 ▲(1.01% Upside)

The overall stock score of 60 reflects a combination of strong financial performance and reasonable valuation, offset by weak technical indicators. The company's profitability and efficient use of equity are positive, but challenges in revenue growth and cash flow generation, along with high leverage, pose risks. The bearish technical signals indicate current market pessimism, which could impact short-term performance.

Volvo AB Business Overview & Revenue Model

Company Description

AB Volvo (publ), together with its subsidiaries, manufactures and sells trucks, buses, construction equipment, and marine and industrial engines in Europe, North America, South America, Asia, Africa, and Oceania. The company offers trucks for long-haulage, construction, mining, and distribution purposes under the Volvo, UD Trucks, Renault Trucks, Mack, Eicher, Arquus, cellcentric, and Dongfeng Trucks brands; and city and intercity buses, coaches, and bus chassis, as well as associated transport systems under the Prevost and Nova Bus brands. It also provides construction equipment, including excavators, articulated and rigid haulers, wheel loaders, road construction machines, pavers, and compactors under the brand names of Volvo, and SDLG Trucks. In addition, the company offers engines and power solutions for leisure and commercial vessels, as well as for power generation, industrial, and off-road applications under the Volvo Penta brand name. Further, it provides financing, insurance, rental, spare parts, repair, preventive maintenance, service agreement, and assistance services. The company offers its products and services through a network of dealerships and workshops. It has a strategic alliance with Isuzu Motors within commercial vehicles; a partnership with Samsung SDI Co to develop battery packs for its trucks; and an agreement with NVIDIA and Aurora to develop autonomous trucks. AB Volvo (publ) was incorporated in 1915 and is headquartered in Gothenburg, Sweden.

How the Company Makes Money

Volvo AB generates revenue primarily through the sale of its vehicles and equipment across various segments. The major revenue streams include the sale of heavy-duty trucks through Volvo Trucks, which represents a significant portion of the company's earnings. Additionally, Volvo Buses contributes to revenue through the sale of public transportation vehicles. Volvo Construction Equipment generates income from selling machinery and equipment for construction and infrastructure projects. The company also earns revenue from aftermarket services, including spare parts, maintenance, and repair services, which provide recurring income. Strategic partnerships with other firms and entities, such as collaborations with technology companies to integrate advanced safety and connectivity features, further enhance Volvo's revenue potential. Furthermore, the company's focus on sustainability and electric vehicle development positions it well in the evolving market landscape, potentially attracting new customers and increasing sales in the future.

Volvo AB Financial Statement Overview

Summary

Volvo AB demonstrates strong financial health with robust revenue growth and profitability, stable leverage, and consistent cash flow generation. The company has effectively managed costs and maintained operational efficiency, as reflected in its margins. Minor areas to monitor include rising debt levels and the impact of increased capital expenditures on free cash flow.

Income Statement

Volvo AB shows strong revenue growth with a significant increase in total revenue over the years, especially evident in the TTM period. The gross profit margin is strong at 26.72% for TTM, indicating effective cost management. The net profit margin of 8.93% for TTM reflects steady profitability, although slightly lower compared to the previous year. Consistent EBIT and EBITDA margins underscore operational efficiency, with a TTM EBIT margin of 12.04% and an EBITDA margin of 16.81%. Overall, the income statement reflects robust growth and profitability, with minor fluctuations in net income.

Balance Sheet

The balance sheet of Volvo AB shows a stable financial position with a debt-to-equity ratio of 1.30 in the TTM period, indicating a balanced leverage. The equity ratio is healthy at 28.51%, showing a strong equity base relative to total assets. Return on equity (ROE) for TTM stands at 23.56%, demonstrating efficient use of shareholders' funds to generate profits. However, the total debt has increased over the years, which might pose a risk if not managed properly. Overall, the balance sheet reflects a stable financial position with moderate leverage.

Cash Flow

Volvo AB's cash flow statement shows a positive trend with strong operating cash flow generation, amounting to 44.38 billion in the TTM period. Free cash flow is positive, although it has decreased from the previous year, indicating increased capital expenditures. The operating cash flow to net income ratio is close to 1, reflecting effective conversion of income to cash. However, the free cash flow to net income ratio is lower, which indicates a higher reinvestment in the business. Overall, cash flow health is satisfactory, with consistent cash generation but increased investment activity.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	500.08B	526.82B	552.76B	473.48B	372.22B	338.45B
Gross Profit	125.84B	144.05B	149.32B	111.74B	89.75B	79.13B
EBITDA	76.06B	91.35B	88.81B	68.34B	63.13B	43.30B
Net Income	38.06B	50.39B	49.83B	32.72B	32.79B	19.32B
Balance Sheet
Total Assets	677.60B	714.56B	681.81B	629.06B	515.86B	510.82B
Cash, Cash Equivalents and Short-Term Investments	61.63B	73.49B	73.61B	67.18B	50.79B	71.92B
Total Debt	265.59B	258.85B	233.52B	205.05B	151.45B	152.78B
Total Liabilities	510.59B	517.20B	501.07B	462.83B	371.74B	362.68B
Stockholders Equity	163.91B	194.05B	177.79B	162.72B	141.04B	145.29B
Cash Flow
Free Cash Flow	19.68B	28.06B	3.00B	7.40B	11.81B	13.29B
Operating Cash Flow	42.73B	46.44B	26.68B	33.24B	33.65B	30.61B
Investing Cash Flow	-23.81B	-24.14B	-26.84B	-21.49B	-1.49B	-9.94B
Financing Cash Flow	-12.04B	-21.87B	1.82B	7.48B	-57.55B	6.44B

Volvo AB Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 258.40
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SE:VOLV.A, the sentiment is Negative. The current price of 258.4 is below the 20-day moving average (MA) of 262.23, below the 50-day MA of 271.03, and below the 200-day MA of 276.26, indicating a bearish trend. The MACD of -3.21 indicates Negative momentum. The RSI at 40.92 is Neutral, neither overbought nor oversold. The STOCH value of 61.68 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for SE:VOLV.A.

Volvo AB Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
HEXA.B	―	kr316.09B	42.28	6.71%	1.34%	-0.93%	-34.25%
SAND	―	kr362.39B	24.59	16.39%	1.99%	-1.77%	21.13%
SAAB.B	―	kr274.53B	53.25	13.56%	0.38%	22.49%	30.47%
ALFA	―	kr184.38B	22.11	20.42%	1.87%	3.54%	20.94%
SKF.B	―	kr113.17B	23.25	8.90%	3.12%	-4.16%	-12.95%
Sector *	―	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%
VOLV.A	―	kr532.50B	14.94	20.27%	3.10%	-7.96%	-31.18%