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Snap-on (SNA)
NYSE:SNA
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Snap-on
(NYSE:SNA)
80Outperform
Positive Factors
Financial Performance
Snap-on’s Q4/24 financial results included a net sales increase with strong performances in the C&I Group and RS&I Group.
Innovation and Technology
SNA is increasingly leveraging AI across all facets of its operation, driving both new product development and operational efficiencies.
Negative Factors
Tools Segment Performance
Sales in the Tools business, Snap-on's largest segment by revenue, declined 1.4% year over year organically.
Snap-on (SNA) vs. S&P 500 (SPY)
Market Cap
$17.78B
Dividend Yield2.36%
Average Volume (3M)373.13K
Price to Earnings (P/E)17.5
Beta (1Y)0.83
Revenue Growth<0.01%
EPS Growth3.74%
CountryUS
Employees13,000
SectorIndustrials
Sector Strength72
IndustryIndustrial Goods
Share Statistics
EPS (TTM)19.50
Shares Outstanding52,393,234
10 Day Avg. Volume374,253
30 Day Avg. Volume373,130
Financial Highlights & Ratios
PEG Ratio4.69
Price to Book (P/B)N/A
Price to Sales (P/S)3.51
Price to Cash Flow (P/CF)15.30
P/FCF Ratio14.80
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$352.80Price Target Upside5.08% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering5
Snap-on Business Overview & Revenue Model
Company DescriptionSnap-on Incorporated is a leading global innovator, manufacturer, and marketer of tools, equipment, diagnostics, repair information, and systems solutions for professional users. The company primarily serves various sectors including automotive, aerospace, agriculture, and marine. Snap-on's core products include hand tools, power tools, tool storage products, diagnostic software, information and management systems, and workshop equipment.
How the Company Makes MoneySnap-on makes money through the sale of its wide range of professional tools and equipment. The company's revenue model is based on direct sales to professionals and businesses, as well as through a network of franchisees and distributors. Key revenue streams include the sale of hand and power tools, diagnostic equipment, and software solutions. Snap-on also generates income through its financing arm, Snap-on Credit, which provides financial services to franchisees and customers. Significant factors contributing to its earnings include strategic partnerships with automotive manufacturers, expansion into international markets, and continuous innovation in product offerings.
Snap-on Financial Statement Overview
Summary
Snap-on displays strong financial health with high profitability and solid cash flows. The income statement shows a strong net profit margin of 22.2%, although revenue declined by 7.9%, indicating a need for growth strategies. The balance sheet is robust with a low debt-to-equity ratio and high equity ratio, suggesting potential for leveraging growth. Cash flow generation is excellent, with a free cash flow growth of 7.1%, highlighting efficient capital management.Income Statement
Snap-on's income statement reflects strong profitability and growth. The gross profit margin for 2024 is 50.5%, and the net profit margin stands at 22.2%, indicating efficient cost management and strong bottom-line performance. However, revenue decreased by 7.9% from the previous year, highlighting a need for revenue growth strategies. EBIT and EBITDA margins are 5.9%, showing room for improvement in operational efficiency.85
Very Positive
Balance Sheet
The balance sheet is robust with a strong equity position, as evidenced by a debt-to-equity ratio of 0.23 and an equity ratio of 68.3%. ROE is at 19.4%, reflecting good returns on shareholder investments. The company maintains a stable financial structure, but the relatively low debt utilization suggests potential leverage capacity for growth.78
Positive
Cash Flow
Cash flow statements highlight excellent cash generation, with a free cash flow growth of 7.1%. The operating cash flow to net income ratio is 1.17, and free cash flow to net income ratio is 1.09, underscoring efficient cash conversion. These metrics indicate strong cash flow health and effective capital expenditure management.92
Very Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Mar 2022 | Mar 2021 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 4.71B | 5.11B | 4.49B | 4.25B | 3.59B | Gross Profit |
| 2.38B | 2.62B | 2.18B | 2.11B | 1.75B | EBIT |
| 1.35B | 1.31B | 1.21B | 1.12B | 880.50M | EBITDA |
| 1.52B | 1.48B | 1.35B | 1.25B | 991.40M | Net Income Common Stockholders |
| 1.04B | 1.01B | 911.70M | 820.50M | 627.00M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 1.36B | 1.00B | 757.20M | 780.00M | 923.40M | Total Assets |
| 7.90B | 7.54B | 6.97B | 6.76B | 6.56B | Total Debt |
| 1.27B | 1.28B | 1.25B | 1.23B | 1.48B | Net Debt |
| -92.70M | 279.80M | 488.50M | 454.50M | 561.20M | Total Liabilities |
| 2.48B | 2.45B | 2.47B | 2.56B | 2.71B | Stockholders Equity |
| 5.39B | 5.07B | 4.48B | 4.18B | 3.82B |
| Cash Flow | Free Cash Flow | |||
| 1.13B | 1.06B | 591.00M | 896.50M | 943.00M | Operating Cash Flow |
| 1.22B | 1.15B | 675.20M | 966.60M | 1.01B | Investing Cash Flow |
| -204.10M | -331.80M | -206.20M | -290.40M | -187.80M | Financing Cash Flow |
| -649.80M | -572.90M | -485.00M | -818.80M | -84.30M |
Snap-on Technical Analysis
Negative
335.73
Price Trends
340.66
Negative
342.11
Negative
306.21
Positive
Market Momentum
-1.54
Negative
46.71
Neutral
64.23
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SNA, the sentiment is Negative. The current price of 335.73 is below the 20-day moving average (MA) of 336.84, below the 50-day MA of 340.66, and above the 200-day MA of 306.21, indicating a neutral trend. The MACD of -1.54 indicates Negative momentum. The RSI at 46.71 is Neutral, neither overbought nor oversold. The STOCH value of 64.23 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for SNA.
Snap-on Risk Analysis
Snap-on disclosed 26 risk factors in its most recent earnings report. Snap-on reported the most risks in the “Ability to Sell” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Snap-on Peers Comparison
Overall Rating
UnderperformOutperform
Sector (62)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
80 Outperform | $17.78B | 17.53 | 19.95% | 2.36% | <0.01% | 3.74% | |
78 Outperform | $10.98B | 22.02 | 19.60% | 0.92% | 10.59% | 27.04% | |
77 Outperform | $24.39B | 9.55 | 24.30% | 1.16% | -2.99% | 159.26% | |
67 Neutral | $78.11B | 26.26 | 25.87% | 1.07% | 0.41% | 19.76% | |
63 Neutral | $9.99B | 19.13 | 28.63% | 1.90% | -0.90% | -1.69% | |
62 Neutral | $8.16B | 12.85 | 0.64% | 3.04% | 3.83% | -15.83% | |
57 Neutral | $13.39B | 47.02 | 3.22% | 3.76% | -2.63% | ― |
* Industrials Sector Average
Performance Comparison
SNA
Snap-on
335.73
48.26
16.79%
DOV
Dover
180.77
7.37
4.25%
ITT
ITT
133.87
7.77
6.16%
PH
Parker Hannifin
611.19
78.50
14.74%
AOS
A. O. Smith Corporation
67.11
-17.36
-20.55%
SWK
Stanley Black & Decker
82.86
-5.26
-5.97%
Snap-on Earnings Call Summary
Earnings Call Date: Feb 6, 2025 | % Change Since: -5.12% | Next Earnings Date: Apr 17, 2025
Earnings Call Sentiment Neutral
The earnings call presented a mixed picture with strong performance in critical industries and record profitability in certain segments, offset by challenges in the Tools Group and financial services. The macroeconomic environment remains a concern, impacting sales of big ticket items.Highlights
Record Operating Margin for RS&I
RS&I Group achieved an operating margin of 26.6%, up 150 basis points from last year, marking the highest ever for the group.
C&I Group Sales and Profitability Growth
C&I Group sales reached $379.2 million, an all-time high, with a 3.9% organic increase. Operating earnings were up 17.4%, with an operating margin of 16.7%, an improvement of 180 basis points.
Consolidated Operating Margin Improvement
Consolidated operating margin before financial services improved by 50 basis points to 22.1%, setting a new all-time high for the fourth quarter.
Strong Performance in Critical Industries
C&I Group saw strong sales in critical industries, particularly in customized kits and specialty torque, with notable gains in aviation and general industries.
Lowlights
Decline in Tools Group Sales
Tools Group sales decreased to $506.6 million, representing a 1.4% organic sales decline, with challenges in the U.S. market due to macroeconomic uncertainties.
Financial Services Earnings Decline
Financial services operating earnings decreased by $1.2 million to $66.7 million, despite a 3.4% increase in revenue.
Lower Big Ticket Item Sales
A decline in extended credit originations was noted, reflecting lower sales of big ticket, longer payback items such as tool storage.
Macroeconomic Uncertainty Impact
Uncertain macroeconomic conditions, including geopolitical tensions and domestic policy shifts, continued to affect market confidence and customer preferences.
Company Guidance
During the Snap-on Incorporated Q4 Full Year 2024 Results Conference Call, the company reported overall sales of $1,198.7 million, marking a slight increase of 0.2% from the previous year. Gross margin improved by 140 basis points to 49.7%, while the operating company operating income (OpCo OI) margin reached an all-time high for the fourth quarter at 22.1%, up 50 basis points. The financial services segment saw earnings of $66.7 million, slightly down by $1.2 million, resulting in a consolidated margin of 25.5%, an improvement of 30 basis points. Earnings per share (EPS) for the quarter were $4.82, up $0.07 from $4.75 recorded in 2023. The Commercial and Industrial (C&I) group achieved record sales of $379.2 million, with operating income up 17.4% to $63.5 million, and the Repair Systems & Information (RS&I) group posted a 1.6% organic sales increase, reaching an operating margin of 26.6%, up 150 basis points. The Tools Group faced a 1.4% organic sales decline but continued efforts to pivot towards customer preferences, emphasizing fast payback items. Throughout the call, Snap-on expressed confidence in its market resilience and strategic positioning despite ongoing macroeconomic uncertainties.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.