Honda Motor Co Ltd

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HMC : NYSE : Consumer Goods
$30.44 up 0.09 | 0.3%
Today's Range: 30.3334 - 30.614
Avg. Daily Volume: 649900.0
01/20/17 - 4:02 PM ET

Financial Analysis


HONDA MOTOR CO LTD's gross profit margin for the second quarter of its fiscal year 2016 has increased when compared to the same period a year ago. The company has grown its sales and net income during the past quarter when compared with the same quarter a year ago, and although its growth in net income has outpaced the industry average, its revenue growth has not. HONDA MOTOR CO LTD has weak liquidity. Currently, the Quick Ratio is 0.82 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 8.84% 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 Q2 FY16 Q2 FY15
Net Sales ($mil)32760.2730805.11
EBITDA ($mil)5471.274118.58
EBIT ($mil)2293.561413.32
Net Income ($mil)1775.991095.4


Balance Sheet Q2 FY16 Q2 FY15
Cash & Equiv. ($mil)16596.2813718.61
Total Assets ($mil)167853.44152927.7
Total Debt ($mil)59952.3356771.51
Equity ($mil)64860.5559589.44


Profitability Q2 FY16 Q2 FY15
Gross Profit Margin32.3830.67
EBITDA Margin16.713.36
Operating Margin7.04.59
Sales Turnover0.810.77
Return on Assets2.332.76
Return on Equity6.047.1
Debt Q2 FY16 Q2 FY15
Current Ratio1.151.2
Debt/Capital0.480.49
Interest Expense31.0836.7
Interest Coverage73.7938.51


Share Data Q2 FY16 Q2 FY15
Shares outstanding (mil)1802.281802.29
Div / share0.190.18
EPS0.990.6
Book value / share35.9933.06
Institutional Own % n/a n/a
Avg Daily Volume665713.0698637.0

Valuation


BUY. The current P/E ratio indicates a premium compared to an average of 9.91 for the Automobiles industry and a significant discount compared to the S&P 500 average of 25.49. For additional comparison, its price-to-book ratio of 0.84 indicates a significant discount versus the S&P 500 average of 2.84 and a significant discount versus the industry average of 3.30. 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 13.83 Peers 9.91   HMC 5.25 Peers 13.92

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.

 

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 10.82 Peers 10.46   HMC 0.29 Peers 1.49

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 0.84 Peers 3.30   HMC -7.24 Peers 71.18

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 0.40 Peers 1.08   HMC 15.11 Peers 17.54

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 trails its peers on the basis of sales growth

 

 

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