One-glance verdict
Within fair range
$29.27 our estimate vs market $32.48
Wall Street consensus: $34.50 (17.9% higher than our fair-value estimate)
11% above our estimate
Fundamentals snapshot
AB Volvo (publ)
VLVLY · PNK · Industrials · Farm & Heavy Construction Machinery
Current price
$32.48
52-week range
$26.77 - $39.62
Market cap
$66.05B
Balance sheet
Healthy
27.01x Strong cushion
Net cash $0.00. Interest coverage shows how many times profit covers the interest bill.
What stands out
3 Rewards
3 Risks
3 rewards · 3 risks
- Reward Returns 20.9% on equity, ahead of 60% of its peers.
- Reward Free cash flow was positive in 4/10 years.
- Risk Stock trades 1271.1% above its 5-year average P/E.
- Risk Net debt grew 32.1% over 3 years.
What this company does
AB Volvo (publ)
AB Volvo is a global company that makes and sells trucks (including well-known brands like Mack and Volvo), buses, and construction equipment. The company's success is closely tied to the health of the global economy, as it earns most of its money when businesses are buying new vehicles for shipping and new equipment for construction projects.
How the company got here
AB Volvo was founded in Sweden in 1927 by Assar Gabrielsson and Gustaf Larsson. The first vehicle produced was a car, but the company quickly expanded into trucks and buses in the late 1920s and early 1930s. A key moment in the company's history was the decision to sell its passenger car division, Volvo Cars, to Ford Motor Company in 1999, which is now owned by Geely Holding Group. This allowed AB Volvo to focus on its commercial vehicle and industrial equipment businesses. Over the years, the company grew by acquiring other companies, including its engine supplier, which became Volvo Penta, and a tractor manufacturer that evolved into Volvo Construction Equipment.
What it actually does
AB Volvo is a company that makes heavy-duty vehicles and equipment used for transportation and construction. You'll see their products on highways and at construction sites, including large trucks for hauling goods, buses for public transportation, and machines like excavators and loaders for building projects. They also produce engines for boats and industrial machinery. The company sells its products under several brand names, such as Volvo, Mack Trucks, Renault Trucks, and Volvo Penta.
Trucks
This is the largest part of AB Volvo's business, making up the majority of its sales. This segment builds and sells medium to heavy-duty trucks used for long-distance shipping, regional delivery, and construction work. The customers are typically businesses, like trucking companies and construction firms, that need reliable vehicles for their operations. You might recognize some of their truck brands, which include Volvo Trucks, Renault Trucks, and Mack Trucks.
Construction Equipment
This is another significant part of the company, focused on machinery used for building and road construction. They make a variety of equipment, including excavators (for digging), wheel loaders (for moving materials), and haulers (large dump trucks). The customers for this equipment are construction companies and contractors who buy or lease these machines for their projects. This segment operates under brands like Volvo, SDLG, and Rokbak.
Buses
This segment produces buses and bus chassis (the underlying frame of the vehicle) for public transportation and tourism. Their products include city buses, long-distance coaches, and the frames upon which other manufacturers can build their own bus bodies. The primary customers are public transit authorities and private transportation companies that operate bus fleets.
Volvo Penta
This division specializes in making engines and complete power systems for boats, both for leisure and commercial use, as well as for industrial applications like power generators. Customers include boat builders who install these engines in new vessels and industrial companies that need reliable power sources for their equipment. Volvo Penta started as an engine supplier that Volvo acquired early in its history.
Financial Services
This part of the company helps customers buy or lease the products that the other segments sell. It offers financing (loans), leasing options, and insurance for trucks, construction equipment, and buses. This makes it easier for businesses to afford the expensive equipment they need, which in turn helps AB Volvo sell more of its products. Their customers are the same businesses that buy the vehicles and equipment, as well as the dealers who sell them.
What management is betting on now
The company is heavily focused on leading the shift to electric and fossil-free transportation and machinery. They are investing in battery-electric and hydrogen technologies for their trucks and construction equipment to meet sustainability goals and new regulations. Another key priority is to grow their service business, which includes maintenance, repairs, and spare parts for the millions of Volvo vehicles and machines in operation. Management believes that expanding services will create a stable and profitable source of revenue (money the company earns from its business activities).
Price history
How the share price has moved
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Is it cheap or expensive?
Fair value $29.27 vs current price $32.48
Wall Street consensus is the average analyst price target: $34.50 (17.9% higher than our fair-value estimate).
Our most-likely fair value is $29.27 a share — about 9.9% away from today's price of $32.48, so the stock currently looks fairly priced.
Is it drowning in debt?
Healthy
Net cash $0 - more cash than debt. Interest coverage 27.0x.
Net debt
$0.00
Interest coverage
27.01x
AB Volvo (publ)'s profit covers its interest bill about 27.0 times over. which is stronger than every peer shown here.
Healthy
Worse cushion
Baseline
Better cushion
VLVLY
BASELINE
AB Volvo (publ)
Total debt — Interest coverage 27.01x This is the baseline the peer rows are being compared against.
Total debt $14.82B Interest coverage 10.42x -61% vs VLVLY Carries about 2.6x less debt cushion than VLVLY.
Total debt $8.29B Interest coverage 11.75x -57% vs VLVLY Carries about 2.3x less debt cushion than VLVLY.
Total debt $64.58B Interest coverage 2.65x -90% vs VLVLY Carries about 10.2x less debt cushion than VLVLY.
Total debt $32.76B Interest coverage 6.48x -76% vs VLVLY Carries about 4.2x less debt cushion than VLVLY.
What you should know
The case for and against VLVLY
3 Rewards
3 Risks
Rewards
-
Returns 20.9% on equity, ahead of 60% of its peers.
-
Free cash flow was positive in 4/10 years.
-
Trades at 17.3x P/E vs peer median 27.4x (36.9% cheaper).
Risks
-
Stock trades 1271.1% above its 5-year average P/E.
-
Net debt grew 32.1% over 3 years.
-
Operating margin compressed from 10.5% to 0.0% over 3 years.
The numbers
All the key metrics, grouped by purpose
Tap any ? icon to learn what it means.
Valuation
How expensive the stock looks
P/E (TTM)
17.28x
Forward P/E
11.54x
P/B
0.38x
P/S
—
EV/EBITDA
—
PEG ratio
0.94x
Profitability
How much profit each dollar creates
Gross margin
24.4%
Operating margin
0.0%
Net margin
7.6%
ROE
20.9%
ROA
4.5%
Health
Liquidity and balance-sheet strength
Debt / equity
1.47x
Current ratio
1.10x
Quick ratio
0.80x
Total debt
—
Total cash
—
Growth
How the business has been compounding
Revenue TTM
$48.36B
Revenue 5Y CAGR
0.4%
EPS TTM
1.88
EPS 5Y CAGR
1.7%
Cash flow
How much cash the business throws off
Operating CF TTM
$4.60B
Free CF TTM
$1.96B
FCF margin
4.1%
Dividend
Shareholder payout
Yield
2.8%
Payout ratio
49.3%
Last ex-div date
2026-04-10