Honda Motor Co., Ltd. (HMC) stock analysis

In our weekly check, Honda Motor Co., Ltd. is graded C (A to F). Of 23 checks on debt, profit, cash flow and trend: 12 pass, warnings: 4, red flags: 7.

About Honda Motor Co., Ltd.

Honda Motor Co., Ltd. is a Consumer Cyclical company (Auto - Manufacturers) based in Japan, listed on NYSE as HMC.

What our checks show for HMC

Red flags

• Operating profit does not cover the interest bill (-1.4x): interest is paid from cash or new debt.
• The net margin fell by 5.6 points over 5 years, to -0.8%: the company keeps less of each sale as profit.
• The gross margin fell by 3.3 points, to 17.2%: costs are rising faster than prices.
• Earnings per share fell 30.3% a year over the last 3 years.
• The company is losing money: the net margin is -0.8%.
• Honda Motor Co., Ltd. pays a dividend while losing money: it is funded from reserves or debt.
• Return on capital (ROCE) is zero or negative: the business does not earn on the money put into it.

Warning signs

• Analysts expect only about 4.1% a year of growth in revenue.
• Free cash flow is only 0% of revenue.
• The stock has fallen as much as 55% from a peak. Would you have held through that?
• Recovering from its deepest fall took about 2.1 years.

Strengths

• Debt is low: 1.14x equity.
• Operating cash flow is 7.91x net profit: the profit arrives as real cash.
• Analysts expect earnings per share to grow about 93.7% a year over the next years.
• Analysts expect the net margin to improve by 5 points from today's -0.8%.
• A large company: market value $44.63 billion.
• Beta 0.31: the stock usually moves less than the market.

Next earnings report: 2026-11-11

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Questions

What grade does Honda Motor Co., Ltd. (HMC) have?

In our weekly check, Honda Motor Co., Ltd. is graded C (A to F). Of 23 checks on debt, profit, cash flow and trend: 12 pass, warnings: 4, red flags: 7. The grade is a risk check, not a buy or sell recommendation.

What are the main risks of HMC stock?

This week's biggest flags for Honda Motor Co., Ltd.: Weak interest cover, Margins falling, Gross margin falling. In total 11 of 23 checks show a warning or a red flag.

What does Honda Motor Co., Ltd. do?

Honda Motor Co., Ltd. is a Consumer Cyclical company (Auto - Manufacturers) based in Japan, listed on NYSE as HMC.

When does Honda Motor Co., Ltd. report earnings next?

The next earnings report is expected on 2026-11-11. We re-run the checks every week, so the grade can change after it.

The grade is a risk check, not a price forecast, and not investment advice. In our 10-year test (S&P 500, 2016-2026), stocks we graded A or B fell more than 30% 2-3 times less often than D or F, without a lower average return.

Updated 2026-10-24

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