Halma plc (HLMA) AI Stock Analysis

• Market Cap: £10.49B
• Dividend Yield: 0.79%
• Average Volume (3M): 804.34K
• Price to Earnings (P/E): 36.5
• Beta (1Y): 0.90
• Revenue Growth: 11.94%
• EPS Growth: 20.48%
• Country: UK
• Employees: 8,623
• Sector: Industrials
• Sector Strength: 66
• Industry: Industrial Conglomerates
• EPS (TTM): 0.76
• Shares Outstanding: 379,645,360
• 10 Day Avg. Volume: 563,293
• 30 Day Avg. Volume: 804,338
• PEG Ratio: 1.78
• Price to Book (P/B): N/A
• Price to Sales (P/S): 4.92
• Price to Cash Flow (P/CF): 28.00
• P/FCF Ratio: 29.20
• 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: 2,940.00p
• Price Target Upside: 6.14% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 4

Halma plc scores well due to robust financial performance and positive earnings call outcomes, reflecting strong growth and strategic execution. However, the high valuation and moderate technical indicators slightly temper the overall score. Key strengths include revenue growth and cash flow management, while challenges in specific sectors and a high P/E ratio pose risks.

Positive Factors

Financial Performance

Financial performance has been strong from Halma over the past 12 months, and the shares have moved up accordingly.

Growth Potential

Halma expects another strong year of free cash flow, which continues to give headroom for acquisitions to show good momentum through the fiscal year.

Negative Factors

Revenue Dependency

A single customer in the Environmental & Analysis division accounts for 14% of group revenue, suggesting materially more concentration risk in this portfolio business.

Halma plc Business Overview & Revenue Model

Company Description

Halma plc is a global group of life-saving technology companies, with a focus on sectors including safety, health, and environmental markets. The company operates through four main segments: Process Safety, Infrastructure Safety, Environmental & Analysis, and Medical. Halma's core products and services include hazard detection and life protection products, water and environmental analysis products, and medical devices used to enhance the quality of life.

How the Company Makes Money

Halma plc generates revenue primarily through the sale of its diverse range of products and services across its four business segments. In Process Safety, the company earns from providing products that protect assets and people at work, such as gas detection and pipeline monitoring systems. The Infrastructure Safety segment contributes to revenue by offering fire and smoke detectors, security sensors, and elevator safety products. The Environmental & Analysis segment provides water and environmental monitoring products, which are sold to generate income. The Medical segment brings in revenue through the sale of health assessment and diagnostic equipment, as well as devices for patient treatment and care. Halma's earnings are bolstered by strategic acquisitions, which expand its technological capabilities and market reach, as well as by fostering long-term relationships with key customers and partners.

Halma plc Financial Statement Overview

Summary

Halma plc demonstrates strong financial health with consistent revenue growth, solid profitability margins, and effective cash flow management. While the balance sheet displays a prudent leverage strategy, the rising debt levels warrant careful monitoring.

Income Statement

Halma plc has demonstrated a solid performance in its income statement. The gross profit margin stands at 49.7% for the latest year, indicating strong profitability. The company’s net profit margin improved to 13.2%, reflecting efficient cost management. Revenue growth has been consistent, with a 9.8% increase from the previous year. EBIT and EBITDA margins are robust at 18.1% and 23.4%, respectively, showcasing operational efficiency.

Balance Sheet

The balance sheet of Halma plc shows a healthy financial position. The debt-to-equity ratio is 0.46, suggesting a balanced approach to leverage. The return on equity is strong at 15.5%, indicating effective use of shareholders' funds. The equity ratio is 57.9%, demonstrating a stable capital structure with a good proportion of assets financed by equity. However, the increase in total debt over time could pose a risk if not managed carefully.

Cash Flow

Cash flow analysis reveals positive trends for Halma plc. The company has achieved substantial free cash flow growth of 70.7% over the previous year, reflecting strong cash generation capabilities. The operating cash flow to net income ratio is 1.43, indicating efficient conversion of income to cash. Additionally, the free cash flow to net income ratio is 1.24, further highlighting the company's ability to generate cash relative to its earnings.

Breakdown
Mar 2024	Mar 2023	Mar 2022	Mar 2021	Mar 2020
Income Statement		Total Revenue
2.03B	1.85B	1.53B	1.32B	1.34B
	Gross Profit
1.01B	877.90M	724.30M	613.60M	631.30M
	EBIT
367.70M	321.50M	284.80M	252.30M	245.60M
	EBITDA
476.70M	411.30M	401.80M	354.00M	320.60M
	Net Income Common Stockholders
268.80M	234.50M	244.40M	203.40M	184.40M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
142.70M	169.50M	157.40M	134.10M	106.30M
	Total Assets
3.00B	2.79B	2.20B	1.88B	1.94B
	Total Debt
795.90M	766.20M	432.20M	390.30M	481.60M
	Net Debt
653.20M	596.70M	274.80M	256.20M	375.30M
	Total Liabilities
1.26B	1.19B	792.80M	709.60M	800.20M
	Stockholders Equity
1.74B	1.60B	1.40B	1.17B	1.14B
Cash Flow		Free Cash Flow
333.40M	195.30M	189.40M	226.20M	196.10M
	Operating Cash Flow
385.00M	241.20M	229.40M	268.40M	244.90M
	Investing Cash Flow
-287.50M	-369.60M	-134.90M	-65.00M	-276.90M
	Financing Cash Flow
-119.70M	138.50M	-73.70M	-173.50M	64.80M

Halma plc Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 2770.00
• 50DMA: Negative
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For GB:HLMA, the sentiment is Neutral. The current price of 2770 is below the 20-day moving average (MA) of 2884.75, below the 50-day MA of 2836.72, and above the 200-day MA of 2626.38, indicating a neutral trend. The MACD of -20.87 indicates Positive momentum. The RSI at 38.06 is Neutral, neither overbought nor oversold. The STOCH value of 17.71 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for GB:HLMA.

Halma plc Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
HLMA	80 Outperform	£10.49B	36.48	15.48%	0.79%	11.94%	20.48%
SMIN	78 Outperform	£6.77B	27.60	11.21%	2.15%	3.13%	13.36%
DPLM	68 Neutral	£5.90B	45.61	14.56%	1.32%	13.59%	6.14%
RSW	67 Neutral	£2.06B	21.08	10.72%	2.62%	4.71%	0.43%
Sector *	62 Neutral	$8.11B	13.34	1.17%	3.02%	4.16%	-15.14%

Halma plc Corporate Events

Halma plc Announces Executive Share Award Transaction

Halma plc announced a transaction involving the grant of a Performance Share Award under the Executive Share Plan to Carole Cran, the Chief Financial Officer Designate. This transaction, involving 54,301 ordinary shares, reflects the company’s commitment to aligning managerial interests with shareholder value, potentially impacting its operational focus and stakeholder confidence.

Halma plc Announces Share Transactions by Key Personnel

Halma plc has disclosed a notification in accordance with the Market Abuse Regulation, revealing share transactions by key managerial personnel. Sharmila Nebhrajani, a Non-Executive Director, purchased 187 ordinary shares, while Carole Cran, the Chief Financial Officer Designate, acquired 8,000 shares. These transactions indicate confidence in Halma’s market positioning and may impact stakeholder perceptions positively.

Halma Announces CFO Transition, Strengthens Leadership for Growth

Halma plc has announced a leadership transition with the retirement of Chief Financial Officer (CFO) Steve Gunning, effective March 31, 2025. Carole Cran, an experienced finance leader and current non-executive director at Halma, has been appointed as CFO Designate and will officially assume the role on April 1, 2025. This change aligns with the company’s succession plans, ensuring continued focus on strategic growth and operational excellence. The appointment is expected to bolster Halma’s financial leadership, leveraging Cran’s extensive experience and familiarity with the company’s sustainable growth model. This transition is significant for stakeholders as it underscores Halma’s commitment to maintaining robust governance and financial stewardship.