Aptiv PLC (APTV, Financial) has recently been in the spotlight, drawing interest from investors and financial analysts due to its robust financial stance. With shares currently priced at $72.22, Aptiv PLC has witnessed a daily loss of 0.47%, marked against a three-month change of 38.94%. A thorough analysis, underlined by the GF Score, suggests that Aptiv PLC is well-positioned for substantial growth in the near future.
What Is the GF Score?
The GF Score is a stock performance ranking system developed by GuruFocus using five aspects of valuation, which has been found to be closely correlated to the long-term performances of stocks by backtesting from 2006 to 2021. The stocks with a higher GF Score generally generate higher returns than those with a lower GF Score. Therefore, when picking stocks, investors should invest in companies with high GF Scores. The GF Score ranges from 0 to 100, with 100 as the highest rank.
- Financial strength rank: 6/10
- Profitability rank: 9/10
- Growth rank: 8/10
- GF Value rank: 8/10
- Momentum rank: 8/10
Each one of these components is ranked and the ranks also have positive correlation with the long term performances of stocks. The GF score is calculated using the five key aspects of analysis. Through backtesting, we know that each of these key aspects has a different impact on the stock price performance. Thus, they are weighted differently when calculating the total score. With a high GF Score of 92 out of 100, Aptiv PLC signals the highest outperformance potential.
Understanding Aptiv PLC Business
Aptiv PLC is a prominent player in the automotive industry, with a market capitalization of $15.7 billion and sales amounting to $19.6 billion. The company operates through two main segments: Signal and Power Solutions, and Advanced Safety and User Experience. The Signal and Power Solutions segment supplies components and systems that make up a vehicle's electrical system, including wiring assemblies and harnesses, connectors, electrical centers, and hybrid electrical systems. The Advanced Safety and User Experience segment focuses on vehicle technology and services in advanced safety, user experience, and smart vehicle computing and software, as well as cloud-native software platforms, autonomous driving technologies, and DevOps tools.
Financial Strength Breakdown
According to the Financial Strength rating, Aptiv PLC's robust balance sheet exhibits resilience against financial volatility, reflecting prudent management of capital structure. The Interest Coverage ratio for Aptiv PLC stands impressively at 5.65, underscoring its strong capability to cover its interest obligations. This robust financial position resonates with the wisdom of legendary investor Benjamin Graham, who favored companies with an interest coverage ratio of at least 5. With a favorable Debt-to-Revenue ratio of 0.43, Aptiv PLC's strategic handling of debt solidifies its financial health.
Profitability Rank Breakdown
The Profitability Rank shows Aptiv PLC's impressive standing among its peers in generating profit. Aptiv PLC's Operating Margin has increased by 64.49% over the past five years, as shown by the following data: 2020: 6.28; 2021: 7.77; 2022: 7.71; 2023: 8.83; 2024: 10.32. Furthermore, Aptiv PLC's Gross Margin has seen a consistent rise over the past five years, as evidenced by the data: 2020: 14.85; 2021: 15.60; 2022: 15.07; 2023: 17.15; 2024: 18.83. This trend underscores the company's growing proficiency in transforming revenue into profit. Aptiv PLC's strong Predictability Rank of 3.0 stars out of five underscores its consistent operational performance, providing investors with increased confidence.
Growth Rank Breakdown
Ranked highly in Growth, Aptiv PLC demonstrates a strong commitment to expanding its business. The company's 3-Year Revenue Growth Rate is 10.1%, which outperforms better than 60.41% of 1,263 companies in the Vehicles & Parts industry. Moreover, Aptiv PLC has seen a robust increase in its earnings before interest, taxes, depreciation, and amortization (EBITDA) over the past few years. Specifically, the three-year growth rate stands at 25.8, and the rate over the past five years is 6.7. This trend accentuates the company's continued capability to drive growth.
Conclusion
With its strong financial strength, impressive profitability, and robust growth metrics, Aptiv PLC's GF Score highlights the firm's unparalleled position for potential outperformance. The company's strategic initiatives and commitment to innovation in the automotive industry further bolster its market position. As investors seek opportunities for growth and stability, Aptiv PLC stands out as a compelling choice. GuruFocus Premium members can find more companies with strong GF Scores using the following screener link: GF Score Screen.
This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
