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1. Company Snapshot

1.a. Company Description

Vestas Wind Systems A/S engages in the design, manufacture, installation, and services of wind turbines the United States, the United Kingdom, Denmark, and internationally.The company operates in two segments, Power Solutions and Service.The Power Solutions segment offers onshore and offshore wind power plants, wind turbines, development sites, etc.


The Service segment engages in the sale of service contracts, spare parts, and related activities.The company was founded in 1898 and is headquartered in Aarhus, Denmark.

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1.b. Last Insights on VWS

Vestas Wind Systems' recent performance has been driven by strong fourth-quarter equipment orders, exceeding consensus expectations, with 5,476 MW of announced deals across EMEA, the Americas, and APAC. The company's record revenue in 2025, with a 9% increase, and strategic plans for 2026, also contributed positively. Additionally, a North Sea wind pact, aiming to create the world's largest clean energy reservoir, aligns with Vestas' core role in designing and manufacturing wind turbines for offshore wind farms. However, regulatory changes in the US have made wind power investments less attractive.

1.c. Company Highlights

2. Vestas' 2025 Earnings: A Record-Breaking Year

Vestas reported a record-high revenue of EUR 18.8 billion for 2025, representing a 9% year-on-year growth driven by a larger amount of megawatt delivered in Power Solutions. The EBIT margin stood at 5.7%, and the company proposed a dividend of DKK 0.74 per share. The actual EPS came out at EUR 3.41, significantly higher than the estimated EUR 0.3378. The revenue growth was partially offset by a 3% currency headwind. The company's net cash position ended the year at EUR 1.2 billion.

Publication Date: Feb -06

📋 Highlights
  • Record Revenue Growth: EUR 18.8 billion in 2025, up 9% YoY, driven by Power Solutions (9% growth) despite 3% currency headwind.
  • Service Segment Challenges: Revenue down 16% YoY due to reduced contract and transactional sales, with EBIT margin at 10% in Q4 (down YoY) from offshore ramp-up costs.
  • 2026 Outlook: Revenue guidance of EUR 20–22 billion and EBIT margin of 6–8%, with offshore wind progress highlighted (50+ turbines installed).
  • Shareholder Returns: EUR 150 million share buyback and EUR 100 million dividend proposed, aligning with 40% payout ratio target and EUR 250 million buyback announced in 2026.
  • Sustainability Impact: 463 million tonnes of greenhouse gas emissions avoided in 2025, with 50% CO2 reduction target by 2030 and 45% Scope 3 reduction goal.

Segment Performance

The Service segment's revenue decreased by 16% year-on-year due to a decrease in contract revenue and lower transactional sales. However, the service EBIT of EUR 626 million was in line with the revised guidance. The Power Solutions segment saw a 7% year-on-year revenue increase in Q4, driven by higher megawatt delivered in Offshore. The EBIT margin in Q4 was 10%, down year-on-year due to higher depreciations and ramp-up costs in Offshore.

Guidance and Outlook

Vestas expects revenue between EUR 20 billion to EUR 22 billion and an EBIT margin before special items between 6% to 8% in 2026. The company is confident about its Offshore business ramp-up and technology, with over 50 turbines installed. The Service segment is expected to see margin improvement driven by a commercial reset and a focus on disciplining the company's approach to contracts.

Valuation and Capital Allocation

With a P/E Ratio of 26.49 and an EV/EBITDA of 14.01, the market seems to be pricing in a certain level of growth and profitability. Vestas aims to return at least 40% of its net profit through a combination of dividend and share buybacks. The company has announced a share buyback of EUR 150 million and proposes a dividend of EUR 100 million. The net debt to EBITDA ratio is expected to remain healthy, at -2.51.

Sustainability and Growth Prospects

Vestas is making significant progress in its sustainability efforts, with a record-high of 463 million tonnes of greenhouse gas emissions avoided over the lifetime of turbines produced and shipped in 2025. The company has a strong pipeline, driven by increasing demand for wind energy due to electrification, data centers, and manufacturing. As Henrik Andersen, CEO, noted, "Wind energy strengthens security through national decentralized power generation." Analysts estimate next year's revenue growth at 8.7%, indicating a positive outlook for the company.

3. NewsRoom

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Vestas to supply turbines for Vanguard West offshore wind project

09:56

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RWE and Vestas agree turbine supply agreement for Vanguard West offshore wind farm

09:00

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Vestas New Zealand Wind Order Links Green Hydrogen To Long Term Services

Feb -11

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PNE Group Receives Permits for two New Wind Farms in Germany in the Fourth Quarter of 2025

Feb -10

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Vestas Wind Systems AS (VWDRY) Q4 2025 Earnings Call Highlights: Record Revenue and Strategic ...

Feb -05

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Vestas Shares Slide After Mixed Earnings Report

Feb -05

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Wind turbine maker Vestas sees record revenue in 2025

Feb -05

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Vattenfall and Vestas sign agreement for low-emission steel

Jan -29

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4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (6.43%)

6. Segments

Power Solutions

Expected Growth: 6.0%

Vestas Wind Systems' Power Solutions segment growth is driven by increasing demand for renewable energy, government incentives, and declining technology costs. The company's strong market position, diversified product portfolio, and expanding service offerings also contribute to its 6.0% growth rate, driven by investments in wind energy projects and favorable regulatory environments.

Service

Expected Growth: 8.0%

Vestas Wind Systems A/S service growth of 8.0% is driven by increasing demand for wind energy, driven by renewable energy targets, declining technology costs, and government incentives. The company's service segment benefits from long-term maintenance contracts, high-margin upgrades, and digitalization efforts, enabling predictive maintenance and increasing turbine efficiency.

7. Detailed Products

Vestas Wind Turbines

Vestas wind turbines are designed to convert wind energy into electricity. They offer a wide range of turbine models with varying hub heights, rotor diameters, and power ratings to suit different wind conditions and project requirements.

Vestas Wind Power Solutions for Islands and Isolated Grids

Vestas offers wind power solutions specifically designed for islands and isolated grids, including hybrid power plants that combine wind power with other energy sources like diesel or solar power.

Vestas Digital Solutions

Vestas digital solutions include advanced data analytics, monitoring, and control systems to optimize wind farm performance, predict maintenance needs, and improve overall efficiency.

Vestas Service and Maintenance

Vestas offers a range of service and maintenance solutions, including inspections, repairs, and replacements, to ensure optimal turbine performance and extend their lifespan.

Vestas Wind Farm Development and Construction

Vestas offers wind farm development and construction services, including site assessment, permitting, and project management, to help customers bring their wind energy projects to life.

8. Vestas Wind Systems A/S's Porter Forces

Forces Ranking

Threat Of Substitutes

The threat of substitutes for Vestas Wind Systems A/S is relatively low due to the growing demand for renewable energy sources and the limited availability of alternative energy solutions that can match the efficiency and sustainability of wind power. Although other renewable energy sources like solar and hydroelectric power exist, they have their own limitations and geographical constraints, making wind power a preferred choice for many regions.

Bargaining Power Of Customers

The bargaining power of customers for Vestas Wind Systems A/S is moderate. While customers, typically utility companies and governments, have some negotiating power due to the availability of alternative suppliers in the market, Vestas's strong brand reputation, extensive product portfolio, and comprehensive service offerings limit the customers' ability to exert significant pressure on pricing and terms.

Bargaining Power Of Suppliers

The bargaining power of suppliers for Vestas Wind Systems A/S is relatively low. Although some critical components like bearings and gearboxes have limited suppliers, Vestas's scale, market position, and long-term supply agreements enable it to negotiate favorable terms with its suppliers. Additionally, Vestas's efforts to develop and source materials and components from a broader supplier base further mitigate supplier bargaining power.

Threat Of New Entrants

The threat of new entrants for Vestas Wind Systems A/S is moderate. The wind turbine manufacturing industry requires significant investment in research and development, manufacturing capacity, and distribution networks. While these barriers to entry are substantial, they do not prevent new entrants entirely. The market's growth potential and government incentives for renewable energy attract new players, but the competition remains manageable due to the industry's complexity and Vestas's first-mover advantage.

Intensity Of Rivalry

The intensity of rivalry among competitors for Vestas Wind Systems A/S is high. The global wind turbine market is highly competitive, with major players like Siemens Gamesa, GE Renewable Energy, and Goldwind. These competitors offer similar products and services, leading to aggressive pricing, innovation, and marketing strategies. The competition is further intensified by the industry's growth, the similarity of products, and the competitors' strategic importance.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 0.00%
Debt Cost 4.28%
Equity Weight 100.00%
Equity Cost 9.11%
WACC 9.11%
Leverage 0.00%

11. Quality Control: Vestas Wind Systems A/S passed 4 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

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Sandvik

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Growth: 4.8

Quality: 6.9

Yield: 3.8

Momentum: 8.0

Volatility: 8.0

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Siemens

A-Score: 5.2/10

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Growth: 5.0

Quality: 5.6

Yield: 5.0

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Volatility: 5.7

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KONE

A-Score: 4.4/10

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Growth: 3.3

Quality: 6.7

Yield: 5.6

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Vestas Wind Systems

A-Score: 4.3/10

Value: 3.7

Growth: 7.4

Quality: 4.7

Yield: 0.6

Momentum: 8.0

Volatility: 1.3

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Value: 1.3

Growth: 5.9

Quality: 7.3

Yield: 3.1

Momentum: 3.0

Volatility: 4.3

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Siemens Energy

A-Score: 3.8/10

Value: 1.3

Growth: 6.1

Quality: 5.1

Yield: 0.0

Momentum: 9.5

Volatility: 1.0

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

157.6$

Current Price

157.6$

Potential

-0.00%

Expected Cash-Flows