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Honda Motor Company (HMC)
NYSE:HMC
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Honda Motor Company
(NYSE:HMC)73Outperform
Honda Motor Company (HMC) vs. S&P 500 (SPY)
Market Cap
$44.42B
Dividend Yield2.67%
Average Volume (3M)1.14M
Price to Earnings (P/E)6.3
Beta (1Y)0.59
Revenue Growth4.37%
EPS Growth6.93%
CountryUS
Employees217,662
SectorConsumer Cyclical
Sector Strength53
IndustryVehicles
Share Statistics
EPS (TTM)4.30
Shares Outstanding1,760,000,000
10 Day Avg. Volume1,117,502
30 Day Avg. Volume1,138,867
Financial Highlights & Ratios
PEG Ratio0.92
Price to Book (P/B)N/A
Price to Sales (P/S)0.33
Price to Cash Flow (P/CF)N/A
P/FCF Ratio0.00
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price TargetN/A
Price Target UpsideN/A
Rating ConsensusModerate Buy
Number of Analyst Covering0
Honda Motor Company Business Overview & Revenue Model
Company DescriptionHonda Motor Co., Ltd. is a Japan-based public multinational conglomerate corporation which manufactures and sells automobiles, motorcycles, and power products in Japan, North America, Europe, Asia, and internationally. It operates through the following segments: Automobiles, Motorcycles, Financial service, and Life Creation and other businesses.
How the Company Makes MoneyHonda Motor Company generates revenue through multiple streams across its diverse product lines. The automotive segment is the largest revenue contributor, where Honda designs, manufactures, and sells a wide range of vehicles, including sedans, SUVs, and hybrid models. The motorcycle segment also plays a significant role, with Honda being a global leader in motorcycle manufacturing, offering models for various uses from commuter bikes to high-performance motorcycles. Additionally, Honda's power products division sells equipment like generators, lawn mowers, and outboard motors. The company also gains revenue through its financial services, which provide financing and leasing options for its automotive and motorcycle customers. Key partnerships, such as joint ventures in automotive manufacturing and technology collaborations, further enhance Honda's revenue potential and market reach.
Honda Motor Company Financial Statement Overview
Summary
Honda Motor Company presents a strong financial position with growing revenues, robust profitability margins, and an improved balance sheet with no debt. However, cash flow issues, particularly negative free cash flow in the latest period, pose a potential risk and need to be monitored closely. The company is well-positioned financially, but improving cash flow generation will be critical for sustained growth.Income Statement
Honda Motor Company has shown solid revenue growth with a TTM (Trailing-Twelve-Months) revenue of ¥21.76 trillion, a significant increase from previous years. The gross profit margin is healthy at approximately 21.5%, indicating efficient cost management. The net profit margin of 4.8% and EBIT margin of 6.6% in TTM highlight moderate profitability. However, the revenue growth rate from the previous annual period to TTM is around 6.5%, which, while positive, indicates a deceleration in growth. The EBITDA margin remains robust at 13.8%.78
Positive
Balance Sheet
Honda's balance sheet is strong with total assets at ¥31.37 trillion and stockholders' equity at ¥13.07 trillion, giving an equity ratio of 41.7%, which suggests a solid financial structure. The company has managed to reduce its total debt to zero in the latest TTM, eliminating leverage risk. The return on equity (ROE) stands at 8.0% in TTM, reflecting effective use of equity to generate profit. The absence of debt in the latest period greatly enhances financial stability.81
Very Positive
Cash Flow
The cash flow analysis for Honda shows a decline in free cash flow (FCF) to a negative ¥221.39 billion in TTM from positive values previously, indicating challenges in cash generation. The operating cash flow to net income ratio is 0.46 in TTM, suggesting that cash earnings are not fully translating into cash flow. Free cash flow to net income ratio is negative, which is concerning and warrants attention for future cash management.65
Positive
| Breakdown | |||||
| TTM | Mar 2024 | Mar 2023 | Mar 2022 | Mar 2021 | Mar 2020 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 21.76T | 20.43T | 16.91T | 14.55T | 13.17T | 14.93T | Gross Profit |
| 4.68T | 4.26T | 3.33T | 2.98T | 2.73T | 3.08T | EBIT |
| 1.45T | 1.38T | 839.40B | 871.23B | 660.21B | 633.64B | EBITDA |
| 3.01T | 3.17T | 2.40T | 2.36T | 2.08T | 2.28T | Net Income Common Stockholders |
| 1.04T | 1.11T | 651.42B | 707.07B | 657.42B | 455.75B |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 5.18T | 5.18T | 4.07T | 3.89T | 3.05T | 2.86T | Total Assets |
| 29.77T | 29.77T | 24.67T | 23.97T | 21.92T | 20.46T | Total Debt |
| 10.08T | 10.08T | 7.67T | 8.10T | 7.72T | 7.47T | Net Debt |
| 5.13T | 5.13T | 3.86T | 4.43T | 4.96T | 4.80T | Total Liabilities |
| 16.77T | 16.77T | 13.12T | 13.20T | 12.55T | 12.18T | Stockholders Equity |
| 12.70T | 12.70T | 11.23T | 10.47T | 9.08T | 8.01T |
| Cash Flow | Free Cash Flow | ||||
| -221.39B | 138.61B | 1.50T | 1.23T | 521.24B | 378.16B | Operating Cash Flow |
| 478.88B | 747.28B | 2.13T | 1.68T | 1.07T | 979.41B | Investing Cash Flow |
| -962.62B | -867.27B | -678.06B | -376.06B | -796.88B | -619.48B | Financing Cash Flow |
| 814.79B | 918.65B | -1.47T | -615.72B | -283.98B | -87.41B |
Honda Motor Company Technical Analysis
Positive
27.33
Price Trends
28.01
Positive
28.00
Positive
30.01
Negative
Market Momentum
-0.04
Negative
58.55
Neutral
53.94
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For HMC, the sentiment is Positive. The current price of 27.33 is below the 20-day moving average (MA) of 27.79, below the 50-day MA of 28.01, and below the 200-day MA of 30.01, indicating a neutral trend. The MACD of -0.04 indicates Negative momentum. The RSI at 58.55 is Neutral, neither overbought nor oversold. The STOCH value of 53.94 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for HMC.
Honda Motor Company Risk Analysis
Honda Motor Company disclosed 21 risk factors in its most recent earnings report. Honda Motor Company reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Honda Motor Company Peers Comparison
Overall Rating
UnderperformOutperform
Sector (60)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
76 Outperform | $240.23B | 7.16 | 14.45% | 2.65% | -0.59% | 7.56% | |
74 Outperform | $44.99B | 7.10 | 9.53% | 1.01% | 9.08% | -15.25% | |
73 Outperform | $44.42B | 6.35 | 7.98% | 2.67% | 4.37% | 6.93% | |
71 Outperform | $36.15B | 6.24 | 13.11% | 7.99% | 5.00% | 35.92% | |
60 Neutral | $13.01B | 10.45 | 0.79% | 3.53% | 1.60% | -22.47% |
* Consumer Cyclical Sector Average
Performance Comparison
HMC
Honda Motor Company
27.33
-8.91
-24.59%
F
Ford Motor
9.12
-2.39
-20.76%
GM
General Motors
45.22
5.37
13.48%
TM
Toyota Motor
180.66
-71.74
-28.42%
STLA
Stellantis
11.80
-13.63
-53.60%
RACE
Ferrari
459.59
45.62
11.02%
Honda Motor Company Earnings Call Summary
Earnings Call Date: Feb 13, 2025 | % Change Since: -0.91% | Next Earnings Date: May 9, 2025
Earnings Call Sentiment Neutral
The earnings call presented a mixed performance. While the motorcycle segment showed strong sales and operating profit increased, there were significant challenges in the automobile sector, including declining sales and increased costs. The currency effects and investment losses further added to the negative aspects. The share repurchase program and free cash flow were positive notes.Highlights
Strong Motorcycle Sales
Motorcycle sales remained robust globally, achieving a third-quarter cumulative total of 15.5 million units, with expectations for a record high due to strong global demand.
Operating Profit Increase
Third quarter operating profit increased by 63.5 billion yen year on year, totaling 1,139.9 trillion yen.
Share Repurchase Program
A resolution was made to repurchase 1.1 trillion yen worth of company shares, with 184.9 billion yen acquired as of January 31, 2025.
Free Cash Flow
Free cash flows from the businesses, excluding financial services, were 693.7 billion yen during the first nine months.
Lowlights
Automobile Sales Decline
Consolidated automobile unit sales decreased by 297,000 units year on year, mainly due to a decline in Asia, particularly China.
Equity Method Investment Loss
Equity method investment profit decreased by 94.5 billion yen, resulting in a loss of 27.2 billion yen.
Profit Decline
Profit for the period attributable to owners of the parent company was 805.2 billion yen, down 64.3 billion yen year on year.
Increased Incentives and Costs
Increased incentives squeezed profits by 104.3 billion yen, and R&D costs rose by 97.5 billion yen.
Currency Effects
Currency effects negatively impacted profit by 56.3 billion yen.
Company Guidance
During the Honda Motor Company Ltd. FY 2025 third quarter financial results briefing, the company reported a cumulative operating profit of 1,139.9 trillion yen with a 7% operating profit margin. Motorcycle sales were strong globally, reaching 15.5 million units, while automobile sales decreased by 297,000 units year-on-year, primarily due to a decline in Asia, particularly China. Operating cash flow after R&D adjustment was consistent year-on-year at 1,945 trillion yen. The company's full-year consolidated forecasts remain unchanged with an operating profit of 1,420 trillion yen and a profit for the year of 950 billion yen. The forecast for motorcycle unit sales has been revised upward to a record high, while automobile sales have been revised downward to 3.75 million units. A resolution was made to repurchase 1.1 trillion yen worth of company shares, with 184.9 billion yen acquired as of January 31, 2025. In terms of market performance, motorcycle sales were strong in India and Brazil, while automobile sales saw increases in Japan and the United States but declined in China.Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
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.