Honda Motor Co Ltd

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HMC : NYSE : Consumer Goods
$28.83 -0.34 | -1.17%
Today's Range: 28.77 - 29.11
Avg. Daily Volume: 771,200
09/29/16 - 4:02 PM ET

Financial Analysis


HONDA MOTOR CO LTD's gross profit margin for the first quarter of its fiscal year 2016 has increased when compared to the same period a year ago. The company managed to grow both sales and net income at a faster pace than the average competitor in its industry this quarter as compared to the same quarter a year ago. HONDA MOTOR CO LTD has weak liquidity. Currently, the Quick Ratio is 0.80 which shows a lack of ability to cover short-term cash needs. The liquidity decreased from the same period a year ago, despite already having weak liquidity to begin with. This would indicate deteriorating cash flow.

During the same period, stockholders' equity ("net worth") has increased by 5.09% 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 Q1 FY16 Q1 FY15
Net Sales ($mil)33781.5530342.03
EBITDA ($mil)5722.244475.3
EBIT ($mil)2596.511959.75
Net Income ($mil)1699.91523.65


Balance Sheet Q1 FY16 Q1 FY15
Cash & Equiv. ($mil)16277.1913521.16
Total Assets ($mil)166416.86154778.9
Total Debt ($mil)59694.8156934.5
Equity ($mil)63218.6760155.65


Profitability Q1 FY16 Q1 FY15
Gross Profit Margin32.1330.4
EBITDA Margin16.9314.74
Operating Margin7.696.46
Sales Turnover0.80.72
Return on Assets1.942.79
Return on Equity5.127.18
Debt Q1 FY16 Q1 FY15
Current Ratio1.111.14
Debt/Capital0.490.49
Interest Expense30.0939.52
Interest Coverage86.349.59


Share Data Q1 FY16 Q1 FY15
Shares outstanding (mil)1802.281802.29
Div / share0.220.18
EPS0.940.85
Book value / share35.0833.38
Institutional Own % n/a n/a
Avg Daily Volume833246.0811969.0

Valuation


BUY. This stock's P/E ratio indicates a premium compared to an average of 10.01 for the Automobiles industry and a discount compared to the S&P 500 average of 25.19. For additional comparison, its price-to-book ratio of 0.86 indicates a significant discount versus the S&P 500 average of 2.82 and a significant discount versus the industry average of 3.79. The price-to-sales ratio is well below both the S&P 500 average and the industry average, indicating a discount.


Price/Earnings
1 2 3 4 5
premium   discount
  Price/Cash Flow
1 2 3 4 5
premium   discount
HMC 16.87 Peers 10.01   HMC 5.12 Peers 4.60

Premium. A higher P/E ratio than its peers can signify a more expensive stock or higher growth expectations.

HMC is trading at a significant premium to its peers.

 

Premium. 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 premium 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 10.35 Peers 10.21   HMC 0.31 Peers 0.71

Premium. A higher price-to-projected earnings ratio than its peers can signify a more expensive stock or higher future growth expectations.

HMC is trading at a premium to its peers.

 

Discount. 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 trades at a significant discount to its peers.

 
Price/Book
1 2 3 4 5
premium   discount
  Earnings Growth
1 2 3 4 5
lower   higher
HMC 0.86 Peers 3.79   HMC -25.73 Peers 35.03

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.

 

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

However, HMC is expected to significantly trail its peers on the basis of its earnings growth rate.

 
Price/Sales
1 2 3 4 5
premium   discount
  Sales Growth
1 2 3 4 5
premium   discount
HMC 0.41 Peers 1.07   HMC 19.09 Peers 19.07

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.

 

Average. Comparing a company's sales growth to its industry helps to determine if the company is adding or losing market share.

HMC is keeping pace with its peers on the basis of sales growth.

 

 

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