American Axle (AXL) AI Stock Analysis

• Market Cap: $509.06M
• Dividend Yield: N/A
• Average Volume (3M): 2.77M
• Price to Earnings (P/E): 24.4
• Beta (1Y): 1.41
• Revenue Growth: -4.25%
• EPS Growth: N/A
• Country: US
• Employees: 19,000
• Sector: Consumer Cyclical
• Sector Strength: 63
• Industry: Auto - Parts
• EPS (TTM): 0.09
• Shares Outstanding: 118,662,476
• 10 Day Avg. Volume: 2,351,851
• 30 Day Avg. Volume: 2,771,532
• PEG Ratio: -0.62
• Price to Book (P/B): 0.85
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 2.31
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $5.08
• Price Target Upside: 18.41% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 5

• Rating: 66 Neutral
• Price Target: $4.50 ▲(4.90%Upside)

American Axle's overall score reflects strong financial management and strategic initiatives aimed at improving cash flow and reducing leverage. While technical indicators are moderately positive, the valuation suggests some caution due to a high P/E ratio. Earnings call insights show a mixed outlook, with notable strategic progress but also challenges in sales and profitability.

Positive Factors

Financial Performance

AXL posted adjusted FCF of $79.2mm in 4Q:24, which was up YoY from $4.5mm in 4Q:23.

Revenue Growth

The combined company is expected to generate ~$12bn in annual revenue with a ~14% Adj. EBITDA margin including synergies.

Strategic Expansion

Post acquisition, AXL would become the 6th largest supplier in North America by sales and one of the top 25 globally.

Negative Factors

Industry Risks

Uncertainty in the European auto industry, and limited upside potential on mix in NA (trucks) create risk.

Market Challenges

In the short term, the lack of positive catalysts, and weak LV production, especially on key programs may put pressure on the stock.

Market Sentiment

The deal announcement is likely an overhang to the stock.

American Axle Business Overview & Revenue Model

Company Description

American Axle & Manufacturing Holdings, Inc., together with its subsidiaries, designs, engineers, and manufactures driveline and metal forming technologies that supports electric, hybrid, and internal combustion vehicles in the United States, Mexico, South America, China, other Asian countries, and Europe. It operates through Driveline and Metal Forming segments. The Driveline segment offers front and rear axles, driveshafts, differential assemblies, clutch modules, balance shaft systems, disconnecting driveline technology, and electric and hybrid driveline products and systems for light trucks, sport utility vehicles, crossover vehicles, passenger cars, and commercial vehicles. The Metal Forming segment provides axle and transmission shafts, ring and pinion gears, differential gears and assemblies, and connecting rods and variable valve timing products for original equipment manufacturers and tier 1 automotive suppliers. American Axle & Manufacturing Holdings, Inc. has technology development agreement with Suzhou Inovance Automotive Ltd. and REE Automotive Ltd. American Axle & Manufacturing Holdings, Inc. was founded in 1994 and is headquartered in Detroit, Michigan.

How the Company Makes Money

American Axle generates revenue primarily through the sale of its driveline and metal forming products to major automotive manufacturers worldwide. Its key revenue streams include the production and sale of axles, driveshafts, and other driveline components, which are integral to vehicle performance and safety. The company also benefits from long-term supply agreements and partnerships with leading automotive OEMs (Original Equipment Manufacturers), ensuring a steady demand for its products. Additionally, AAM invests in research and development to innovate and adapt its product offerings to the growing market for electric and hybrid vehicles, which is a significant factor contributing to its earnings.

American Axle Financial Statement Overview

Summary

American Axle's financials show moderate performance with challenges in revenue growth but strong cash flow management and balance sheet improvements. The income statement reflects stable operational efficiency despite revenue declines. The balance sheet shows reduced leverage risks, and cash flow statements highlight efficient cash conversion and robust free cash flow growth.

Income Statement

The income statement shows moderate performance with a gross profit margin of 11.69% and a net profit margin of 0.36% for TTM. Revenue growth has been slightly negative at -3.19% compared to the previous year, indicating some challenges in revenue generation. EBIT and EBITDA margins are stable, suggesting decent operational efficiency despite the revenue decline.

Balance Sheet

The balance sheet reflects a strong equity ratio of 11.60%, indicating a solid capital base. The debt-to-equity ratio has improved significantly, demonstrating effective deleveraging. However, the return on equity is fairly low at 3.62% for TTM, pointing to limited profitability relative to equity. Overall, the balance sheet is stable, with reduced leverage risks.

Cash Flow

Cash flow statements present a robust performance with a significant free cash flow growth rate of 7.37%. The operating cash flow to net income ratio is strong at 22.76, suggesting efficient cash conversion. The free cash flow to net income ratio is high, reflecting effective cash management and potential for reinvestment or debt reduction.

Breakdown
TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
5.93B	6.12B	6.08B	5.80B	5.16B	4.71B
	Gross Profit
693.30M	741.40M	624.30M	704.90M	722.70M	582.70M
	EBIT
209.20M	241.40M	146.60M	243.90M	240.60M	188.10M
	EBITDA
566.20M	721.00M	664.40M	732.90M	839.20M	109.70M
	Net Income Common Stockholders
21.60M	35.00M	-33.60M	64.30M	5.90M	-561.10M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
549.20M	552.90M	519.90M	511.50M	530.20M	557.00M
	Total Assets
5.14B	5.06B	5.36B	5.47B	5.64B	5.92B
	Total Debt
121.80M	2.74B	2.98B	3.03B	3.23B	3.57B
	Net Debt
-427.40M	2.18B	2.46B	2.52B	2.70B	3.02B
	Total Liabilities
4.54B	4.50B	4.75B	4.84B	5.18B	5.54B
	Stockholders Equity
596.30M	562.80M	604.90M	627.30M	457.80M	370.50M
Cash Flow		Free Cash Flow
219.40M	204.30M	201.50M	277.50M	357.20M	239.00M
	Operating Cash Flow
491.80M	455.40M	396.10M	448.90M	538.40M	454.70M
	Investing Cash Flow
-246.80M	-254.80M	-184.50M	-243.00M	-161.10M	-218.40M
	Financing Cash Flow
-162.50M	-156.20M	-205.50M	-217.20M	-401.40M	-214.50M

American Axle Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 4.29
• 50DMA: Positive
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For AXL, the sentiment is Negative. The current price of 4.29 is below the 20-day moving average (MA) of 4.44, above the 50-day MA of 3.97, and below the 200-day MA of 5.36, indicating a neutral trend. The MACD of 0.06 indicates Positive momentum. The RSI at 50.39 is Neutral, neither overbought nor oversold. The STOCH value of 36.75 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for AXL.

American Axle Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
ALSN	77 Outperform	$8.73B	11.99	50.15%	1.00%	3.86%	16.02%
BWA	76 Outperform	$7.10B	25.97	5.38%	1.36%	-8.22%	-52.61%
AXL	66 Neutral	$509.06M	24.43	3.40%	―	-4.25%	―
GNTX	66 Neutral	$4.81B	12.55	15.90%	2.24%	-1.66%	-9.20%
ADNT	64 Neutral	$1.35B	805.10	-14.33%	―	-5.33%	-292.58%
Sector *	62 Neutral	$6.88B	11.32	2.95%	3.87%	2.70%	-24.57%
DAN	61 Neutral	$2.52B	―	-2.40%	2.32%	-7.00%	-366.59%

American Axle Corporate Events

American Axle Stockholders Approve Key Governance Proposals

On May 1, 2025, American Axle & Manufacturing Holdings, Inc. held its annual stockholders meeting where four key proposals were voted on. The stockholders approved the Amended and Restated 2018 Omnibus Incentive Plan, elected directors for three-year terms, endorsed executive officer compensation on an advisory basis, and ratified Deloitte & Touche LLP as the independent registered public accounting firm for the fiscal year ending December 31, 2025. These decisions reflect strategic moves to enhance governance and operational efficiency, potentially impacting the company’s future performance and stakeholder confidence.

American Axle Reports Q1 2025 Financial Results

American Axle & Manufacturing Holdings, Inc. reported its financial results for the first quarter of 2025, highlighting a year-over-year increase in operating cash flow despite a decrease in sales to $1.41 billion from $1.61 billion in the same period of 2024. The company achieved a net income of $7.1 million and an adjusted EBITDA of $177.3 million, reflecting a focus on cost control and productivity amid a challenging geopolitical environment. AAM also updated its financial outlook for 2025, targeting sales between $5.65 billion and $5.95 billion and adjusted EBITDA between $665 million and $745 million, while continuing its strategic combination with Dowlais.