Visteon Corp (NASDAQ: VC)

Sector: Consumer Cyclical Industry: Auto Parts CIK: 0001111335
Market Cap 2.79 Bn
P/B 1.88
P/E 9.03
P/S 0.74
ROIC (Qtr) 12.80
Div Yield % 0.54
Rev 1y % (Qtr) -6.43
Total Debt (Qtr) 442.00 Mn
Debt/Equity (Qtr) 0.30

About

Price action

Investment thesis

Bull case

  • Strong operating cash flow of 495M provides robust 1.12x coverage of total debt 442M, indicating excellent debt servicing capability and financial flexibility.
  • Healthy cash reserves of 765M provide 19.62x coverage of short-term debt 39M, demonstrating strong liquidity position and minimal refinancing risk.
  • Strong tangible asset base of 3.03B provides 6.86x coverage of total debt 442M, indicating robust asset backing and low credit risk.
  • Operating cash flow of 495M provides exceptional 38.08x coverage of interest expenses 13M, showing strong debt service capability.
  • Operating cash flow of 495M provides strong 11.25x coverage of stock compensation 44M, indicating sustainable incentive practices.

Bear case

  • Operating cash flow of 495M barely covers its investment activities of (177M), with a coverage ratio of -2.80, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • Operating cash flow of 495M provides thin coverage of dividend payments of (8M) with a -61.88 ratio, suggesting potential dividend sustainability issues if operational performance deteriorates.
  • Cash reserves of 765M provide limited coverage of acquisition spending of (52M), which is -14.71x, suggesting aggressive expansion might strain liquidity if market conditions deteriorate.
  • Free cash flow of 366M represents just -20.33x of debt issuance (18M), suggesting concerning reliance on leverage rather than internal cash generation for growth.
  • Retained earnings of 2.73B provide limited buffer against comprehensive income items of (255M), which is -10.69x, indicating elevated exposure to market risks.

Product and Service 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 0.79 1.16
EV to Cash from Ops. EV/CFO 5.18 9.30
EV to Debt EV to Debt 5.80 34.64
EV to EBIT EV/EBIT 7.14 4.45
EV to EBITDA EV/EBITDA 5.81 7.40
EV to Free Cash Flow [EV/FCF] EV/FCF 7.00 17.25
EV to Market Cap EV to Market Cap 0.92 1.58
EV to Revenue EV/Rev 0.68 3.42
Price to Book Value [P/B] P/B 1.88 -0.33
Price to Earnings [P/E] P/E 9.03 11.70
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Div Coverage (Qtr) 38.63 1.64
Dividend Payout Ratio % Div Payout % (Qtr) 2.40 12.18
Dividend per Basic Share Div per Share (Qtr) 0.28 0.41
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 2.05 13.70
Interest Coverage Int. cover (Qtr) 27.62 -110.44
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) 7.19 -13.49
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) 38.34 27.17
Dividend Growth (1y) % Dividend Growth (1y) % 0.00 1.96
EBIAT Growth (1y) % EBIAT 1y % (Qtr) -41.49 5.41
EBITDA Growth (1y) % EBITDA 1y % (Qtr) 14.25 -8.06
EBIT Growth (1y) % EBIT 1y % (Qtr) 22.53 -22.36
EBT Growth (1y) % EBT 1y % (Qtr) 24.91 -123.98
EPS Growth (1y) % EPS 1y % (Qtr) -39.16 -110.42
FCF Growth (1y) % FCF 1y % (Qtr) 100.00 24.26
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) 3.23 16.01
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 1.16 0.92
Cash Payout Ratio Cash Payout (Qtr) 0.01 -0.25
Cash Ratio Cash Ratio (Qtr) 0.81 0.69
Current Ratio Curr Ratio (Qtr) 1.89 2.88
Debt to Equity Ratio Debt/Equity (Qtr) 0.30 0.22
Interest Cover Ratio Int Coverage (Qtr) 27.62 -110.44
Times Interest Earned Times Interest Earned (Qtr) 27.62 -110.44
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) 12.30 -952.44
EBIT Margin % EBIT Margin % (Qtr) 9.55 -997.37
EBT Margin % EBT Margin % (Qtr) 9.20 -987.56
Gross Margin % Gross Margin % (Qtr) 14.50 -122.43
Net Profit Margin % Net Margin % (Qtr) 8.20 -979.78