Honda Motor Co Ltd

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HMC : NYSE : Consumer Goods
$27.52 -0.18 | -0.65%
Today's Range: 27.4539 - 27.56
Avg. Daily Volume: 782000.0
07/21/17 - 4:02 PM ET

Financial Analysis


HONDA MOTOR CO LTD's gross profit margin for the fourth quarter of its fiscal year 2016 is essentially unchanged when compared to the same period a year ago. Even though sales decreased, the net income has increased, representing an increase to the bottom line. HONDA MOTOR CO LTD has weak liquidity. Currently, the Quick Ratio is 0.87 which shows a lack of ability to cover short-term cash needs. The company's liquidity has increased from the same period last year.

During the same period, stockholders' equity ("net worth") has increased by 8.87% from the same quarter last year. Overall, the key liquidity measurements indicate that the company is in a position in which financial difficulties could develop in the future.

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Income Statement Q4 FY16 Q4 FY15
Net Sales ($mil)38004.838891.25
EBITDA ($mil)5143.73244.85
EBIT ($mil)1494.9-238.48
Net Income ($mil)1076.19-576.92


Balance Sheet Q4 FY16 Q4 FY15
Cash & Equiv. ($mil)18902.9415632.95
Total Assets ($mil)170165.36162153.48
Total Debt ($mil)61117.6658052.38
Equity ($mil)65481.5260144.4


Profitability Q4 FY16 Q4 FY15
Gross Profit Margin31.7731.57
EBITDA Margin13.538.34
Operating Margin3.93-0.61
Sales Turnover0.740.8
Return on Assets3.251.88
Return on Equity8.455.09
Debt Q4 FY16 Q4 FY15
Current Ratio1.211.14
Debt/Capital0.480.49
Interest Expense36.7248.85
Interest Coverage40.71-4.88


Share Data Q4 FY16 Q4 FY15
Shares outstanding (mil)1802.281802.28
Div / share0.220.21
EPS0.6-0.32
Book value / share36.3333.37
Institutional Own % n/a n/a
Avg Daily Volume777284.0761988.0

Valuation


BUY. This stock's P/E ratio indicates a discount compared to an average of 11.32 for the Automobiles industry and a significant discount compared to the S&P 500 average of 24.66. For additional comparison, its price-to-book ratio of 0.76 indicates a significant discount versus the S&P 500 average of 3.07 and a significant discount versus the industry average of 3.85. The price-to-sales ratio is well below both the S&P 500 average and the industry average, indicating a discount. Upon assessment of these and other key valuation criteria, HONDA MOTOR CO LTD proves to trade at a discount to investment alternatives within the industry.


Price/Earnings
1 2 3 4 5
premium   discount
  Price/Cash Flow
1 2 3 4 5
premium   discount
HMC 9.02 Peers 11.32   HMC 6.28 Peers 62.77

Discount. A lower P/E ratio than its peers can signify a less expensive stock or lower growth expectations.

HMC is trading at a discount to its peers.

 

Discount. The P/CF ratio, a stock’s price divided by the company's cash flow from operations, is useful for comparing companies with different capital requirements or financing structures.

HMC is trading at a significant discount to its peers.

 
Price/Projected
Earnings
1 2 3 4 5
premium   discount
  Price to
Earnings/Growth
1 2 3 4 5
premium   discount
HMC 9.45 Peers 10.43   HMC NM Peers 5.50

Average. An average price-to-projected earnings ratio can signify an industry neutral stock price and average future growth expectations.

HMC is trading at a valuation on par with its peers.

 

Neutral. The PEG ratio is the stock’s P/E divided by the consensus estimate of long-term earnings growth. Faster growth can justify higher price multiples.

HMC's negative PEG ratio makes this valuation measure meaningless.

 
Price/Book
1 2 3 4 5
premium   discount
  Earnings Growth
1 2 3 4 5
lower   higher
HMC 0.76 Peers 3.85   HMC 80.58 Peers 10.31

Discount. A lower price-to-book ratio makes a stock more attractive to investors seeking stocks with lower market values per dollar of equity on the balance sheet.

HMC is trading at a significant discount to its peers.

 

Higher. Elevated earnings growth rates can lead to capital appreciation and justify higher price-to-earnings ratios.

HMC is expected to have an earnings growth rate that significantly exceeds its peers.

 
Price/Sales
1 2 3 4 5
premium   discount
  Sales Growth
1 2 3 4 5
premium   discount
HMC 0.40 Peers 1.47   HMC -3.26 Peers 12.59

Discount. In the absence of P/E and P/B multiples, the price-to-sales ratio can display the value investors are placing on each dollar of sales.

HMC is trading at a significant discount to its industry on this measurement.

 

Lower. A sales growth rate that trails the industry implies that a company is losing market share.

HMC significantly trails its peers on the basis of sales growth

 

 

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