Volvo Car AB (publ.) logo

Volvo Car AB (publ.)

VOLCAR-B.ST
37
Auto - Manufacturers · Consumer Cyclical
Price
kr 21.34
+0.40 (+1.91%)
Market Cap
kr 63.27B
Exchange
Stockholm Stock Exchange
Winston Score
37
Winston looking serious
Winston is serious
Below-average fundamentals — multiple weak pillars.

Winston Score below 40. The stock fails on most of our quality checks.

Volvo Car AB makes passenger cars and sells them to everyday consumers around the world. Its main products are SUVs, sedans, and electric vehicles sold under the Volvo Cars brand, which is known for safety features and Scandinavian design. The company is headquartered in Gothenburg, Sweden, and is majority-owned by Chinese automaker Geely.

Volvo Cars earns money primarily by selling vehicles through a global network of dealerships, and it also generates revenue from financial services and software subscriptions tied to its cars. It operates in over 100 countries, with Europe, China, and the United States as its largest markets, and it generated roughly 500 billion Swedish kronor in annual revenue in recent years. The company is pushing hard into fully electric vehicles, which it sees as its main growth driver, but rising EV competition — especially from Chinese automakers — and thin operating margins are the most immediate risks it faces.

Winston Score History

Score breakdown

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Quality

Gross Margin
18.5%
Thin — 18.5% gross margin
Operating Margin
1.7%
Thin — 1.7% operating margin
ROCE
0.7%
Weak — 0.7% return on capital

ROIC between 0% and 5%. They earn a few cents back per dollar invested in the business.

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Growth

Sales YoY
-10.9%
Shrinking sales (-10.9% YoY)
EPS YoY
-95.7%
Earnings shrinking (-95.7% YoY)

Earnings per share down more than 10%. Either a bad year, or a real decline.

EPS Consistency
4/8 quarters
Earnings inconsistent quarter-to-quarter

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Cash Flow

Cash Conversion
5872%
Turns 5872% of profit into real cash
FCF Margin
2.1%
Thin free cash flow (2.1%)

FCF margin between 0% and 10%. Some cash from sales, but not a lot.

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Stability

Debt / Equity
0.21
Conservative — low debt load (0.21)
Interest Cover
N/A
Data not available

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Valuation

P/E Ratio
374.3x
Expensive — P/E 374.3

P/E over 35. The market is pricing in heavy, sustained growth.

P/E vs Forward
+370.1
GROWING
Earnings expected to grow meaningfully — cheaper on forward P/E (374.3 → 4.3)

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Dividends

Not applicable for this business.
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