SMC (SMCAY) AI Stock Analysis

• Market Cap: $21.56B
• Dividend Yield: 1.4%
• Average Volume (3M): 26.30K
• Price to Earnings (P/E): 19.7
• Beta (1Y): 0.91
• Revenue Growth: -6.85%
• EPS Growth: -20.37%
• Country: US
• Employees: 23,144
• Sector: Industrials
• Sector Strength: 78
• Industry: Industrial - Machinery
• EPS (TTM): 0.83
• Shares Outstanding: 1,347,380,000
• 10 Day Avg. Volume: 0
• 30 Day Avg. Volume: 26,303
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): 0.00
• Price to Cash Flow (P/CF): 0.00
• P/FCF Ratio: 0.00
• 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: N/A
• Number of Analyst Covering: 0

SMC's strong balance sheet and stable financial position are significant strengths, but declining revenues and negative cash flow trends are key risks. The technical analysis indicates bearish sentiment, although oversold conditions suggest potential for a short-term rebound. Valuation appears fair, offering moderate income through dividends. Overall, SMC is a financially sound company facing challenges in revenue growth and cash management, reflected in its average stock score.

SMC Business Overview & Revenue Model

Company Description

SMC Corporation (SMCAY) is a leading global manufacturer specializing in the production and sale of pneumatic and automation control equipment. The company operates within the industrial machinery sector, providing a wide range of products including actuators, valves, sensors, and air preparation equipment. SMC serves diverse industries such as automotive, electronics, and food processing, offering solutions that enhance efficiency and productivity through innovative automation technologies.

How the Company Makes Money

SMC Corporation primarily generates revenue through the sale of its pneumatic and automation control products to various industries worldwide. The company's key revenue streams include the manufacturing and distribution of components such as actuators, valves, and air preparation units, which are integral to industrial automation systems. SMC capitalizes on its extensive global network of subsidiaries and distributors to reach a broad customer base, ensuring a steady demand for its products. Additionally, SMC's commitment to research and development fosters innovation, allowing the company to maintain a competitive edge and meet the evolving needs of its clients. Strategic partnerships with manufacturers and industry leaders further bolster SMC's market presence and contribute to its financial performance.

SMC Financial Statement Overview

Summary

SMC exhibits a strong balance sheet with high equity and low leverage, indicating stability and low risk. The income statement reflects solid profitability with strong margins, although revenue and net income are declining. Cash flow challenges, particularly negative free cash flow, suggest the need for improved cash management. Overall, SMC is financially sound but should focus on reversing revenue decline and enhancing liquidity.

Income Statement

The income statement reflects decreasing revenue with a negative growth rate of -5.8% from 2023 to 2024. Gross profit margin stands at 46.7%, indicating strong profitability. However, the net profit margin has decreased to 22.9% due to a decline in net income. The EBIT and EBITDA margins are 25.3% and 36.8%, respectively, showing solid operating efficiency despite revenue challenges. Overall, the income statement portrays a robust yet slightly weakening profitability position.

Balance Sheet

The balance sheet is strong, with a low debt-to-equity ratio of 0.007, indicating minimal leverage. Return on equity (ROE) is 9.5%, reflecting efficient utilization of equity. The equity ratio is high at 89.8%, signifying financial stability and low risk. The company maintains a substantial amount of cash and equivalents, enhancing liquidity. Overall, the balance sheet demonstrates a strong and stable financial position with minimal risk.

Cash Flow

Cash flow statement shows a significant drop in free cash flow, leading to a free cash flow growth rate of -122.4% from 2023 to 2024. The operating cash flow to net income ratio is 0.55, and the free cash flow to net income ratio is negative, indicating challenges in converting profits to cash. Despite a healthy operating cash flow, the negative free cash flow suggests potential issues in cash management. Overall, the cash flow statement indicates a need for improved cash management strategies.

Breakdown
Mar 2024	Mar 2023	Mar 2022	Mar 2021	Mar 2020
Income Statement		Total Revenue
776.87B	824.77B	727.40B	552.18B	526.00B
	Gross Profit
363.08B	421.16B	363.85B	265.85B	259.85B
	EBIT
196.23B	258.20B	227.86B	153.35B	146.25B
	EBITDA
286.09B	283.97B	248.42B	171.94B	162.92B
	Net Income Common Stockholders
178.32B	224.61B	192.99B	121.79B	110.50B
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
511.29B	623.50B	697.05B	640.55B	560.76B
	Total Assets
2.09T	1.93T	1.77T	1.54T	1.39T
	Total Debt
13.07B	12.19B	11.54B	10.79B	11.52B
	Net Debt
-498.19B	-591.38B	-673.29B	-618.50B	-536.79B
	Total Liabilities
208.69B	225.62B	210.68B	159.88B	137.27B
	Stockholders Equity
1.88T	1.70T	1.56T	1.38T	1.25T
Cash Flow		Free Cash Flow
-6.10B	27.24B	75.16B	91.18B	85.63B
	Operating Cash Flow
98.21B	101.62B	156.09B	120.47B	124.61B
	Investing Cash Flow
-131.90B	-87.09B	-116.22B	73.44B	24.92B
	Financing Cash Flow
-87.93B	-113.30B	-88.93B	-56.01B	-49.92B

SMC Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 16.35
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SMCAY, the sentiment is Neutral. The current price of 16.35 is above the 20-day moving average (MA) of 15.85, below the 50-day MA of 17.53, and below the 200-day MA of 20.20, indicating a neutral trend. The MACD of -0.35 indicates Negative momentum. The RSI at 47.83 is Neutral, neither overbought nor oversold. The STOCH value of 98.36 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for SMCAY.

SMC Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
PNR	77 Outperform	$15.35B	24.06	18.59%	1.03%	-0.42%	3.23%
IEX	75 Outperform	$13.71B	28.74	12.73%	1.52%	1.66%	-17.18%
NDSN	71 Outperform	$10.97B	24.56	16.15%	1.57%	0.78%	-8.42%
IR	69 Neutral	$30.93B	37.93	8.09%	0.10%	5.27%	0.61%
ROK	67 Neutral	$28.68B	31.56	26.22%	2.02%	-11.28%	-23.69%
Sector *	64 Neutral	$4.27B	11.80	5.31%	249.79%	4.07%	-9.02%
SMCAY	60 Neutral	$21.56B	19.68	8.42%	1.40%	-6.85%	-20.37%