American Axle & Manufacturing Holdings Inc (NYSE: AXL)

Sector: Consumer Cyclical Industry: Auto Parts CIK: 0001062231
Market Cap 964.93 Mn
P/B 1.34
P/E 23.03
P/S 0.17
ROIC (Qtr) -28.83
Div Yield % 0.00
Rev 1y % (Qtr) 0.03
Total Debt (Qtr) 2.72 Bn
Debt/Equity (Qtr) 3.79

About

Price action

Investment thesis

Bull case

  • Healthy cash reserves of 714.10M provide 16.01x coverage of short-term debt 44.60M, demonstrating strong liquidity position and minimal refinancing risk.
  • Operating cash flow of 442.30M provides strong 28.91x coverage of stock compensation 15.30M, indicating sustainable incentive practices.
  • Tangible assets of 4.77B provide exceptional 83.01x coverage of deferred revenue 57.50M, showing strong service capability backing.
  • Operating cash flow of 442.30M provides strong 7.69x coverage of deferred revenue 57.50M, indicating service delivery capability.
  • Cash reserves of 714.10M provide ample 29.27x coverage of acquisition spending 24.40M, enabling strategic growth opportunities.

Bear case

  • Operating cash flow of 442.30M barely covers its investment activities of (188.90M), with a coverage ratio of -2.34, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • Operating earnings of 252.50M show weak coverage of depreciation charges of 457.40M, with a 0.55 ratio indicating high capital intensity and potential reinvestment needs.
  • Free cash flow of 179.30M represents just -2.33x of debt issuance (77.10M), suggesting concerning reliance on leverage rather than internal cash generation for growth.
  • High depreciation of 457.40M relative to operating cash flow of 442.30M, which is 1.03x suggests significant maintenance capital requirements affecting free cash flow.
  • Retained earnings of (192.60M) provide limited buffer against comprehensive income items of (261.50M), which is 0.74x, indicating elevated exposure to market risks.

Segments Breakdown of Revenue (2024)

Segments Breakdown of Revenue (2024)

Peer comparison

Companies in the Auto Parts
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 ORLY O Reilly Automotive Inc 80.07 Bn 32.23 4.59 8.40 Bn
2 AZO Autozone Inc 57.24 Bn 23.23 2.97 12.05 Bn
3 APTV Aptiv PLC 19.67 Bn 66.67 0.98 8.03 Bn
4 GPC Genuine Parts Co 17.83 Bn 22.05 0.74 6.40 Bn
5 MGA Magna International Inc 15.86 Bn 15.36 0.38 7.48 Bn
6 ALV Autoliv Inc 9.72 Bn 12.92 0.92 2.19 Bn
7 MBLY Mobileye Global Inc. 9.47 Bn -28.17 4.88 0.00 Bn
8 BWA Borgwarner Inc 8.87 Bn 66.21 0.63 3.90 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 0.58 1.16
EV to Cash from Ops. EV/CFO 7.03 9.30
EV to Debt EV to Debt 1.14 34.64
EV to EBIT EV/EBIT 12.31 4.45
EV to EBITDA EV/EBITDA 4.86 7.40
EV to Free Cash Flow [EV/FCF] EV/FCF 17.34 17.25
EV to Market Cap EV to Market Cap 3.22 1.58
EV to Revenue EV/Rev 0.53 3.42
Price to Book Value [P/B] P/B 1.34 -0.33
Price to Earnings [P/E] P/E 23.03 11.70
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Dividend Coverage Ratio 0.00 1.64
Dividend Payout Ratio % Div Payout % (Qtr) 0.00 12.18
Dividend per Basic Share Div per Share (Qtr) 0.00 0.41
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 0.00 13.70
Interest Coverage Int. cover (Qtr) 1.46 -110.44
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) -18.31 -13.49
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) 31.63 27.17
Dividend Growth (1y) % Dividend Growth (1y) % 0.00 1.96
EBIAT Growth (1y) % EBIAT 1y % (Qtr) 1.45 5.41
EBITDA Growth (1y) % EBITDA 1y % (Qtr) -9.86 -8.06
EBIT Growth (1y) % EBIT 1y % (Qtr) 1.53 -22.36
EBT Growth (1y) % EBT 1y % (Qtr) 41.67 -123.98
EPS Growth (1y) % EPS 1y % (Qtr) 47.83 -110.42
FCF Growth (1y) % FCF 1y % (Qtr) 33.01 24.26
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) -3.25 16.01
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 1.09 0.92
Cash Payout Ratio Cash Payout (Qtr) 0.00 -0.25
Cash Ratio Cash Ratio (Qtr) 0.56 0.69
Current Ratio Curr Ratio (Qtr) 1.77 2.88
Debt to Equity Ratio Debt/Equity (Qtr) 3.79 0.22
Interest Cover Ratio Int Coverage (Qtr) 1.46 -110.44
Times Interest Earned Times Interest Earned (Qtr) 1.46 -110.44
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) 12.20 -952.44
EBIT Margin % EBIT Margin % (Qtr) 4.33 -997.37
EBT Margin % EBT Margin % (Qtr) 1.37 -987.56
Gross Margin % Gross Margin % (Qtr) 12.30 -122.43
Net Profit Margin % Net Margin % (Qtr) 0.70 -979.78