ABB Ltd
ABB Ltd Fundamental Analysis
ABB Ltd (ABB) shows weak financial fundamentals with a PE ratio of 28.49, profit margin of 8.41%, and ROE of 17.46%. The company generates $28.8B in annual revenue with weak year-over-year growth of 1.91%.
Key Strengths
Areas of Concern
The stock receives a Fundamental Health Score of 45.3/100 based on profitability, valuation, growth, and balance sheet metrics. The D grade reflects weak fundamentals and significant financial concerns.
Fundamental Health Score
We analyze ABB's fundamental strength across five key dimensions:
Efficiency Score
WeakABB struggles to generate sufficient returns from assets.
Valuation Score
ModerateABB shows balanced valuation metrics.
Growth Score
WeakABB faces weak or negative growth trends.
Financial Health Score
ExcellentABB maintains a strong and stable balance sheet.
Profitability Score
ModerateABB maintains healthy but balanced margins.
Key Financial Metrics
Is ABB Expensive or Cheap?
P/E Ratio
ABB trades at 28.49 times earnings. This indicates a fair valuation.
PEG Ratio
When adjusting for growth, ABB's PEG of 0.28 indicates potential undervaluation.
Price to Book
The market values ABB Ltd at 5.52 times its book value. This suggests the stock is fully valued or overvalued on an asset basis.
EV/EBITDA
Enterprise value stands at 14.90 times EBITDA. This signals the market has high growth expectations.
How Well Does ABB Make Money?
Net Profit Margin
For every $100 in sales, ABB Ltd keeps $8.41 as profit after all expenses.
Operating Margin
Core operations generate 11.33 in profit for every $100 in revenue, before interest and taxes.
ROE
Management delivers $17.46 in profit for every $100 of shareholder equity.
ROA
ABB Ltd generates $6.32 in profit for every $100 in assets, demonstrating efficient asset deployment.
Following the Money - Real Cash Generation
Operating Cash Flow
ABB Ltd generates limited operating cash flow of $1.26B, signaling weaker underlying cash strength.
Free Cash Flow
ABB Ltd generates weak or negative free cash flow of $513.91M, restricting financial flexibility.
FCF Per Share
Each share generates $0.28 in free cash annually.
FCF Yield
ABB converts 0.76% of its market value into free cash.
Financial Ratios Analysis
Valuation Ratios
P/E Ratio
Price to earnings ratio
28.49
vs 25 benchmark
PEG Ratio
Price/earnings to growth ratio
0.28
vs 25 benchmark
P/B Ratio
Price to book value ratio
5.52
vs 25 benchmark
P/S Ratio
Price to sales ratio
2.34
vs 25 benchmark
Financial Health
Debt/Equity
Total debt to shareholders' equity
0.67
vs 25 benchmark
Current Ratio
Current assets to current liabilities
1.18
vs 25 benchmark
Efficiency Ratios
ROE
Return on equity percentage
0.17
vs 25 benchmark
ROA
Return on assets percentage
0.06
vs 25 benchmark
ROCE
Return on capital employed
0.15
vs 25 benchmark
How ABB Stacks Against Its Sector Peers
| Metric | ABB Value | Sector Average | Performance |
|---|---|---|---|
| P/E Ratio | 28.49 | 26.76 | Neutral |
| ROE | 17.46% | 1300.00% | Weak |
| Net Margin | 8.41% | -29570.00% (disorted) | Weak |
| Debt/Equity | 0.67 | 0.79 | Neutral |
| Current Ratio | 1.18 | 10.68 | Neutral |
| ROA | 6.32% | -1545134.00% (disorted) | Weak |
ABB outperforms its industry in 0 out of 6 key metrics, but lagging in ROE.
Historical Growth Performance
5-Year Growth Trajectory
This section reviews ABB Ltd's 5-year compound annual growth rate (CAGR) and compares its performance against the typical investment style of its industry.
Revenue CAGR
-100.00%
Industry Style: Cyclical, Value, Infrastructure
DecliningEPS CAGR
-100.00%
Industry Style: Cyclical, Value, Infrastructure
DecliningFCF CAGR
-100.00%
Industry Style: Cyclical, Value, Infrastructure
Declining