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Time To Buy Vestas Wind Systems

Mar. 08, 2021 11:05 AM ETVestas Wind Systems A/S (VWDRY), VWSYF9 Comments
SimOne Trading profile picture
SimOne Trading


  • In FY20 revenues are up 22% and net profit is up 10%.
  • Vestas Wind Systems had a solid liquidity position.
  • DCF analysis shows a 15% potential upside.

Vestas Wind Systems (OTCPK:VWDRY) (OTCPK:VWSYF) recently released results for the fiscal year 2020. Results showed strong operational performance and good financial fundamentals.

In this article, I will analyze the key financial results of Vestas Wind Systems and I will provide a DCF valuation to support my BUY thesis.

Indeed, I believe that unlike its competitor Siemens Gamesa (which I analyzed in this previous article) Vestas has the potential to generate a 15% return.

About the Company

Vestas Wind Systems is a Danish company founded in 1945 that operates in the wind power industry. Today the Company is the global leader in onshore wind turbine production and in the service and management of wind farms. Vestas also operates in the offshore wind industry where it is the second-largest player, behind Siemens Gamesa.

About the stock

Vestas Wind Systems is trading at DKK1042.5 per share (as of 03/05/2021), with a market cap of DKK209.4 billion. The stock is up c. 66% year-on-year but, because of the recent sell-off, it is down ca. 28.8% year-to-date. The 52-week low is DKK473 and the 52-week high is DKK1605, therefore the stock is trading at 64.9% of its maximum value.

FY-2020 orders and operational results

Vestas Wind Systems managed to have a strong business performance in 2020 despite the impact of COVID-19 that affected markets where the company operates. Order intake for FY-2020 remained stable at 17.3 GW versus the record-high 17.9 GW of 2019. In economic terms, orders amounted at €12.7 billion versus the €13.8 billion of the previous year, with an average selling price of €740k per MW. Backlog increased of €9.1 billion year-on-year with a +€3 billion in the wind turbines business (overall backlog at €19 billion) and +€6.1 billion in the service business (overall at €23.9 billion).

In 2020, Vestas delivered new turbines

This article was written by

SimOne Trading profile picture
Analyzing investment opportunities in EU and US

Analyst’s Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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Comments (9)

More and more people sees that it does not help to destroy the nature and wildlife with windturbines, just to save the climate. Here in Norway, and Europe, it has come to a complete stop (no new installation on land for the next 5 years) and that number do not show up in the books of Vestas, yet! So sell your shares before it's to late! I'm for sure not buying it....
@arnfinn1959 it's too bad you didn't buy it. . . you really missed out!
@arnfinn1959 it seems like it is easier in Europe to install offshores (not much land available) while in the USA it is easier to install on the ground because military make permitting offshore difficult and complicated. So overall Vestas won’t see any business decline, quite contrary as the new gigantic windmills are very efficient and generate huge amount of energy with every turn. With battery costs going down and manufacturing capacity up it is a perfect storm for wind and solar where you pay nothing for the “fuel”.
09 Mar. 2021
Excellent fact filled article, thanks 🤩
Well timed article. It looks like the price will continue to recover now given the share volume today. I wondered how much lower it could really go last week. I'm happy it is going back up, though I was happier to keep purchasing shares in the mid $50s or lower...
newfruit profile picture
Been long a few years and sold a bit around $70, will be adding for the next green wave.
Shepferg2 profile picture
I've held this stock for 4 years. It has been amazing to set my hook in a great company riding a secular trend. As always, if only I had bought more of this, rather than all that RDS.A just before oil crashed! LOL!
I purchased 400 shares @ 23 way back when. Sold 100 @ 147 last year and would like to add some more back.
Emiliano D'Angio profile picture
I completely agree. I've been adding to this name all the way down this correction, I find if it is trading below 1200DKK it's trading at a significant discount.
I've read somewhere political issues may provide some headwinds to keep in mind through 2021.
Good luck to all!
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