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1. Company Snapshot

1.a. Company Description

Saab AB (publ) provides products, services, and solutions for the military defense, aerospace, and civil security markets worldwide.The company operates through five segments: Aeronautics, Dynamics, Surveillance, Kockums, and Combitech.The company develops military and civil aviation technology, as well as conducts studies on manned and unmanned aircraft systems.


It also provides ground combat weapons, missile systems, torpedoes, unmanned underwater vehicles, training and simulation systems, and signature management systems for armed forces; and niche products for the civil and defense market, such as underwater vehicles for the offshore industry.In addition, the company offers solutions for safety and security, surveillance and decision support, and threat detection, location, and protection, which include airborne, ground-based and naval radar, electronic warfare, and combat systems, as well as C4I solutions.Further, it provides product integration, support, technical maintenance, and logistics services, as well as products, solutions, and services.


Additionally, the company offers technology for traffic management and public safety; and supports industry, defense, and public sectors with services comprising cyber security, artificial intelligence, and big data analysis.It also provides submarines with the Stirling system for air independent propulsion, surface combatants, mine hunting systems, and autonomous vessels; and systems development, systems integration, information security, systems security, communications, mechanics, and technical product information.Saab AB (publ) was founded in 1937 and is headquartered in Stockholm, Sweden.

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1.b. Last Insights on SAAB

Saab's recent performance has been impacted by concerns over its valuation, with some analysts questioning whether the stock's rapid returns are sustainable. The company's premium valuation has raised eyebrows, despite optimism over revenue growth. A recent 8% dip in the stock price has sparked debate about its true worth. RBC Capital Markets has maintained a sector perform rating and target price of $40 for CAE, a partner of Saab's in advanced simulation and training services. Additionally, Saab's fair value estimate has increased only slightly, reflecting analysts' cautious stance.

1.c. Company Highlights

2. Transcript Summary

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3. NewsRoom

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How Recent Developments Are Shaping the Story and Valuation Outlook for Saab

Dec -02

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Saab signs contract with Spanish Army for Live Training Systems

Dec -02

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$10.32 Bn Unmanned Underwater Vehicles Global Market Opportunities And Strategies To 2034 with Kongsberg, Boeing, Saab, Oceaneering International, and Lockheed Martin

Nov -27

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European Defense Stocks Fall After U.S. Hails Ukraine Progress

Nov -24

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European Defense Stocks Fall After U.S. Hails Ukraine Progress

Nov -24

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European Defense Stocks Fall as U.S. Pressures Ukraine to Accept Peace Deal

Nov -24

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Does Saab Partnership Signal a New Era for CAE’s Defense Training Ambitions (TSX:CAE)?

Nov -24

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Is Saab’s Massive 100% Rally in 2025 Still Justified After Recent Defense Contracts?

Nov -23

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4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (14.55%)

6. Segments

Surveillance

Expected Growth: 18%

Saab AB's 18% growth in Surveillance is driven by increasing demand for advanced surveillance systems, growing need for border security, and rising adoption of unmanned aerial vehicles (UAVs) for surveillance purposes. Additionally, the company's strategic partnerships and investments in research and development have enabled it to stay ahead in the market, contributing to its rapid growth.

Aeronautics

Expected Growth: 14%

Saab AB's Aeronautics segment growth is driven by increasing demand for military aircraft, unmanned aerial vehicles, and airborne surveillance systems. Strong order intake from countries like Sweden, Norway, and Brazil, as well as growing exports, contribute to the 14% growth. Additionally, investments in research and development, and strategic partnerships, enhance Saab's competitiveness in the global market.

Dynamics

Expected Growth: 12%

Saab AB's 12% growth is driven by increasing demand for its defense and security products, particularly in the areas of radar and electronic warfare. The company's strong order backlog, coupled with its focus on innovation and R&D, has enabled it to capitalize on emerging trends in the defense industry, such as autonomous systems and cybersecurity.

Kockums

Expected Growth: 10%

Kockums' 10% growth is driven by increasing demand for naval defense systems, Saab's strategic investments in R&D, and expansion into emerging markets. Additionally, the company's focus on innovative solutions, such as autonomous underwater vehicles, and its strong relationships with governments and navies worldwide, contribute to its growth momentum.

Combitech

Expected Growth: 15%

Combitech's 15% growth is driven by increasing demand for cybersecurity and digitalization services in the defense and civilian sectors. Saab AB's strong brand reputation and Combitech's expertise in IT and engineering services also contribute to its growth. Additionally, strategic acquisitions and partnerships have expanded Combitech's offerings and geographic reach, further fueling its growth.

Corporate

Expected Growth: 8%

Saab AB's 8% growth is driven by increasing demand for defense and security solutions, expansion into new markets, and strategic acquisitions. The company's focus on innovation, R&D investments, and cost savings initiatives also contribute to its growth. Additionally, the growing need for cybersecurity and digitalization in the defense industry further supports Saab's growth momentum.

7. Detailed Products

Gripen Fighter Jet

A multi-role fighter aircraft designed for air-to-air and air-to-ground combat

A26 Submarine

A next-generation submarine designed for stealth, endurance, and advanced sensors

TactiCall Communication System

A communication system for secure and efficient communication between different units and systems

Giraffe Radar System

A radar system for air surveillance, tracking, and command and control

9LV Combat Management System

A combat management system for naval vessels, integrating sensors, weapons, and communication systems

Sensis Air Traffic Management System

A system for air traffic management, providing surveillance, navigation, and communication

Digital Tower System

A digital tower system for remote air traffic control, providing surveillance and communication

Cybersecurity Solutions

A range of cybersecurity solutions for protecting against cyber threats

8. Saab AB (publ)'s Porter Forces

Forces Ranking

Threat Of Substitutes

Saab AB (publ) operates in the defense and security industry, where substitutes are limited. However, the company faces competition from other defense contractors, which could lead to a moderate threat of substitutes.

Bargaining Power Of Customers

Saab AB (publ) has a diverse customer base, including governments and defense agencies. The company's customers have limited bargaining power due to the specialized nature of its products and services.

Bargaining Power Of Suppliers

Saab AB (publ) relies on a network of suppliers for components and materials. While the company has some bargaining power due to its size and reputation, suppliers may still have some negotiating power due to the specialized nature of their products.

Threat Of New Entrants

The defense and security industry has high barriers to entry, including significant capital requirements and regulatory hurdles. This limits the threat of new entrants and gives Saab AB (publ) a competitive advantage.

Intensity Of Rivalry

The defense and security industry is highly competitive, with several established players competing for contracts and market share. Saab AB (publ) faces intense rivalry from companies such as Lockheed Martin, Boeing, and BAE Systems.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 19.91%
Debt Cost 6.78%
Equity Weight 80.09%
Equity Cost 6.78%
WACC 6.78%
Leverage 24.86%

11. Quality Control: Saab AB (publ) passed 5 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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MTU Aero Engines

A-Score: 4.9/10

Value: 2.2

Growth: 6.1

Quality: 5.5

Yield: 1.2

Momentum: 8.5

Volatility: 6.0

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Saab

A-Score: 4.4/10

Value: 0.6

Growth: 7.9

Quality: 5.6

Yield: 1.2

Momentum: 10.0

Volatility: 1.3

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Leonardo

A-Score: 4.4/10

Value: 1.7

Growth: 6.8

Quality: 4.0

Yield: 1.2

Momentum: 10.0

Volatility: 2.7

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QinetiQ

A-Score: 4.2/10

Value: 5.0

Growth: 4.4

Quality: 2.4

Yield: 2.5

Momentum: 7.5

Volatility: 3.7

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Elbit Systems

A-Score: 4.0/10

Value: 1.1

Growth: 6.2

Quality: 5.1

Yield: 1.9

Momentum: 5.0

Volatility: 4.7

1-Year Total Return ->

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Heckler & Koch

A-Score: 2.3/10

Value: 0.6

Growth: 7.3

Quality: 5.6

Yield: 0.0

Momentum: 0.0

Volatility: 0.0

1-Year Total Return ->

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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

489.25$

Current Price

489.25$

Potential

-0.00%

Expected Cash-Flows