Weg Sa

WEG SA maintains a conservative capital structure with a debt-to-equity ratio of 0.31 and a current ratio of 1.55, indicating adequate short-term liquidity coverage. The company holds BRL 4.26 billion in cash and equivalents against BRL 5.44 billion in long-term debt, resulting in a net cash position that is technically negative after subtracting total debt, which contributes to a medium liquidity risk assessment. Despite this, the firm generates robust operating cash flow of BRL 6.45 billion, which significantly exceeds its capital expenditure of BRL 2.56 billion, although free cash flow is reported as negative BRL 171 million, likely due to working capital adjustments or other non-operating cash uses not detailed in the snapshot.

Profitability metrics are strong, with a return on equity of 36.1% and a return on assets of 14.74%, suggesting efficient use of capital. The company reports a net income of BRL 6.38 billion on revenue of BRL 40.80 billion, yielding a net margin of approximately 15.6%. Operating income stands at BRL 8.00 billion, reflecting an operating margin of roughly 19.6%. These returns are supported by a gross profit of BRL 13.68 billion, indicating a gross margin of 33.5%.

The company’s revenue mix and geographic exposure are not detailed in the provided segments or geography sections, preventing a specific analysis of concentration risk by region or product line. However, the classification as an electrical equipment manufacturer suggests a diversified industrial customer base. The absence of segment data limits the ability to assess specific growth drivers or margin variations across different business units.

Growth trajectory analysis is constrained by the absence of historical periods data in the input. Without five-year annual or eight-quarter quarterly revenue and net income trends, it is not possible to quantify recent growth rates or momentum. The current financial snapshot provides a static view of performance but lacks the temporal depth to evaluate acceleration or deceleration in earnings or sales.

Risk factors include a medium liquidity risk rating and a low dilution risk, with no recent share issuance indicated as basic and diluted shares outstanding are identical at 4.19 billion. The key flag notes that net cash is negative after subtracting total debt, which may impact financial flexibility in a rising interest rate environment. The company’s valuation multiples are elevated, with a P/E of 30.87 and an EV/EBITDA of 24.71, suggesting the market prices in significant future growth or stability.

Recent events include analyst estimates with a mean price target of BRL 54.19 and a median of BRL 52.50, implying upside potential from the current market price of BRL 46.26. The mean recommendation is 2.46, with six buy ratings and five hold ratings, indicating a generally positive but cautious sentiment among analysts. No specific filing, news, or transcript observations are provided to detail recent corporate actions or strategic shifts.

Revenue grew at a 14.7% CAGR over four years, demonstrating strong top-line expansion momentum.

Net income expanded at a 15.5% CAGR, outpacing revenue growth and indicating improving profitability.

Operating margin of 19.7% significantly exceeds the 13.2% median for the electric utilities cohort.

Analysts project 27.2% upside to a mean price target of BRL 54.19.

Cash conversion ratio of 1.03 trails the 1.65 median for the electric utilities cohort.

The company faces a medium level of liquidity risk according to internal risk assessments.

Net income growth slowed to 5.5% year-over-year, decelerating from previous higher rates.

Revenue BRL 9.47B, −6,1% YoY; Operating income −4,9% YoY.

• ▍Revenue BRL 9.47B, −6,1% YoY
• ▍Operating income −4,9% YoY
• ▍Net income −5,8% YoY
• ▍Free cash flow +327,1% YoY
• ▍Net margin 15.4%

Revenue BRL 10.25B, −5,3% YoY; Operating income −6,8% YoY.

• ▍Revenue BRL 10.25B, −5,3% YoY
• ▍Operating income −6,8% YoY
• ▍Net income −6,3% YoY
• ▍Free cash flow −177,5% YoY
• ▍Net margin 15.5%

Revenue BRL 10.27B, +4,2% YoY; Operating income +1,2% YoY.

• ▍Revenue BRL 10.27B, +4,2% YoY
• ▍Operating income +1,2% YoY
• ▍Net income +4,5% YoY
• ▍Free cash flow −93,5% YoY
• ▍Net margin 16.1%

Revenue BRL 10.21B, +10,1% YoY; Operating income +4,7% YoY.

• ▍Revenue BRL 10.21B, +10,1% YoY
• ▍Operating income +4,7% YoY
• ▍Net income +10,4% YoY
• ▍Free cash flow +4,9% YoY
• ▍Net margin 15.6%

Revenue BRL 10.08B; Operating income BRL 1.94B.

• ▍Revenue BRL 10.08B
• ▍Operating income BRL 1.94B
• ▍Net margin 15.3%

Revenue BRL 10.82B; Operating income BRL 2.14B.

• ▍Revenue BRL 10.82B
• ▍Operating income BRL 2.14B
• ▍Net margin 15.7%

Revenue BRL 9.86B; Operating income BRL 2.01B.

• ▍Revenue BRL 9.86B
• ▍Operating income BRL 2.01B
• ▍Net margin 16.0%

Revenue BRL 9.27B; Operating income BRL 1.93B.

• ▍Revenue BRL 9.27B
• ▍Operating income BRL 1.93B
• ▍Net margin 15.5%

Revenue BRL 40.80B, +7,4% YoY; Operating income +4,0% YoY.

• ▍Revenue BRL 40.80B, +7,4% YoY
• ▍Operating income +4,0% YoY
• ▍Net income +5,5% YoY
• ▍Free cash flow −107,1% YoY
• ▍Net margin 15.6%

Revenue BRL 37.99B, +16,9% YoY; Operating income +18,9% YoY.

• ▍Revenue BRL 37.99B, +16,9% YoY
• ▍Operating income +18,9% YoY
• ▍Net income +5,4% YoY
• ▍Free cash flow −7,1% YoY
• ▍Net margin 15.9%

Revenue BRL 32.50B, +8,7% YoY; Operating income +27,4% YoY.

• ▍Revenue BRL 32.50B, +8,7% YoY
• ▍Operating income +27,4% YoY
• ▍Net income +36,2% YoY
• ▍Free cash flow +41,4% YoY
• ▍Net margin 17.6%

Revenue BRL 29.90B, +26,9% YoY; Operating income +17,8% YoY.

• ▍Revenue BRL 29.90B, +26,9% YoY
• ▍Operating income +17,8% YoY
• ▍Net income +17,4% YoY
• ▍Free cash flow +5,8% YoY
• ▍Net margin 14.1%