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American Axle & Manufacturing (AXL)
NYSE:AXL

American Axle (AXL) AI Stock Analysis

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American Axle

(NYSE:AXL)

65Neutral
American Axle's overall score reflects moderate financial performance with strengths in cash flow and balance sheet management. Technical indicators suggest caution, while valuation is reasonable. Strategic initiatives and corporate events offer promise, but operational challenges and revenue pressures weigh on the outlook.
Positive Factors
Debt Management
AXL ended 4Q:24 with a net debt/EBITDA ratio of ~2.7x, compared to 3.3x at the end of 2023.
Financial Performance
AXL posted adjusted FCF of $79.2mm in 4Q:24, which was up YoY from $4.5mm in 4Q:23.
Mergers and Acquisitions
The combined company is expected to generate ~$12bn in annual revenue with a ~14% Adj. EBITDA margin including synergies.
Negative Factors
Industry Trends
There might be potential pressure in Europe from increasing EV volumes, which are a headwind to some products in the portfolio.
Market Challenges
Expected net leverage at closing (2.8X or ~2.5X post synergies of $300m), uncertainty in the European auto industry, and limited upside potential on mix in NA (trucks) create risk.
Stock Performance
In the short term, the lack of positive catalysts, and weak LV production, especially on key programs may put pressure on the stock.

American Axle (AXL) vs. S&P 500 (SPY)

American Axle Business Overview & Revenue Model

Company DescriptionAmerican Axle & Manufacturing Holdings, Inc. (AAM) is a leading global supplier of driveline and drivetrain systems, as well as related components for the automotive industry. The company operates in the automotive sector, primarily focusing on manufacturing axles, driveshafts, and transmission parts that are essential for vehicle powertrain systems. AAM serves a diverse range of customers, including major automotive manufacturers and suppliers worldwide.
How the Company Makes MoneyAmerican Axle & Manufacturing generates revenue primarily through the design, engineering, validation, and manufacturing of driveline and metal forming products. Its key revenue streams include sales of axles, driveshafts, and other related components to original equipment manufacturers (OEMs) and tier-one automotive suppliers. The company also engages in aftermarket sales and services. Strategic partnerships with major automotive companies, such as General Motors and Ford, significantly contribute to its earnings by securing long-term supply contracts. Additionally, AAM invests in research and development to innovate and improve its product offerings, enhancing its competitive position in the automotive market.

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
65
Positive
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
70
Positive
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
78
Positive
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
Dec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income StatementTotal Revenue
6.12B6.08B5.80B5.16B4.71B
Gross Profit
741.40M624.30M704.90M722.70M582.70M
EBIT
241.40M146.60M243.90M240.60M188.10M
EBITDA
721.00M664.40M732.90M839.20M109.70M
Net Income Common Stockholders
35.00M-33.60M64.30M5.90M-561.10M
Balance SheetCash, Cash Equivalents and Short-Term Investments
552.90M519.90M511.50M530.20M557.00M
Total Assets
5.06B5.36B5.47B5.64B5.92B
Total Debt
2.74B2.98B3.03B3.23B3.57B
Net Debt
2.18B2.46B2.52B2.70B3.02B
Total Liabilities
4.50B4.75B4.84B5.18B5.54B
Stockholders Equity
562.80M604.90M627.30M457.80M370.50M
Cash FlowFree Cash Flow
204.30M201.50M277.50M357.20M239.00M
Operating Cash Flow
455.40M396.10M448.90M538.40M454.70M
Investing Cash Flow
-254.80M-184.50M-243.00M-161.10M-218.40M
Financing Cash Flow
-156.20M-205.50M-217.20M-401.40M-214.50M

American Axle Technical Analysis

Technical Analysis Sentiment
Neutral
Last Price4.33
Price Trends
50DMA
4.03
Positive
100DMA
4.82
Negative
200DMA
5.57
Negative
Market Momentum
MACD
0.09
Negative
RSI
62.60
Neutral
STOCH
77.78
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For AXL, the sentiment is Neutral. The current price of 4.33 is above the 20-day moving average (MA) of 3.70, above the 50-day MA of 4.03, and below the 200-day MA of 5.57, indicating a neutral trend. The MACD of 0.09 indicates Negative momentum. The RSI at 62.60 is Neutral, neither overbought nor oversold. The STOCH value of 77.78 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for AXL.

American Axle Risk Analysis

American Axle disclosed 42 risk factors in its most recent earnings report. American Axle reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks

American Axle Peers Comparison

Overall Rating
UnderperformOutperform
Sector (61)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
77
Outperform
$8.18B11.4150.15%1.03%3.86%16.02%
BWBWA
72
Outperform
$6.37B19.595.38%1.45%-8.22%-52.61%
66
Neutral
$4.86B12.6615.90%2.17%-1.66%-9.20%
AXAXL
65
Neutral
$491.09M23.633.40%-4.25%
DADAN
63
Neutral
$2.13B-2.40%2.64%-7.00%-366.59%
61
Neutral
$6.66B11.773.06%3.96%2.60%-21.54%
60
Neutral
$1.06B805.10-14.33%-5.33%-292.58%
* Consumer Cyclical Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
AXL
American Axle
4.28
-3.34
-43.83%
ALSN
Allison Transmission Holdings
98.71
23.03
30.43%
BWA
BorgWarner
31.62
-5.39
-14.56%
DAN
Dana Holding
15.62
2.64
20.34%
GNTX
Gentex
22.21
-12.33
-35.70%
ADNT
Adient
14.67
-14.24
-49.26%

American Axle Earnings Call Summary

Earnings Call Date:May 02, 2025
(Q1-2025)
|
% Change Since: 13.95%|
Next Earnings Date:Aug 01, 2025
Earnings Call Sentiment Neutral
The earnings call presented a mixed outlook, with significant progress in strategic initiatives like joint venture exits and the upcoming Dowlais transaction, while facing challenges such as a decline in sales and profitability due to lower volumes and unfavorable market conditions.
Q1-2025 Updates
Positive Updates
Successful Exits from China Joint Ventures
AAM exited its Hefei AAM Automotive and Liuzhou AAM Automotive joint ventures in China, collecting approximately $30 million in cash.
Approval for Sale of AAM Commercial Vehicle Axle Business
Received approval from the Competition Commission of India to proceed with the sale to Bharat Forge Limited, expecting closure in Q2 2025.
Strong Adjusted EBITDA Margin Improvement
Sequential improvement of approximately 100 basis points in adjusted EBITDA margin, reaching 12.6% of sales.
Positive Free Cash Flow Guidance
Guidance for 2025 includes targeting adjusted free cash flow of $165 million to $215 million, despite a challenging environment.
Transformational Transaction Progress
The combination with Dowlais is on track, with expected $300 million in synergies and significant potential for shareholder value.
Negative Updates
Decline in Sales Year-over-Year
Sales for Q1 2025 were $1.41 billion, down from $1.61 billion in Q1 2024, primarily due to lower volumes in North America and unfavorable FX.
Lower Adjusted EBITDA
Adjusted EBITDA for Q1 2025 was $177.3 million, down from $205.6 million in Q1 2024, with a decremental margin related to sales volume of approximately 27%.
Challenges in North American Production
North American production was down approximately 5% year-over-year, impacting overall sales and profitability.
High Effective Tax Rate
AAM expects an adjusted effective tax rate of approximately 50% at the midpoint, due to valuation allowances and interest deduction limitations.
Company Guidance
During the American Axle & Manufacturing (AAM) first quarter 2025 earnings call, the company provided updated guidance reflecting both current performance and future expectations. AAM is targeting full-year sales between $5.65 billion and $5.95 billion, with adjusted EBITDA projected to range from $665 million to $745 million. The adjusted free cash flow is expected to be between $165 million and $215 million. These projections are based on an assumed North American production volume ranging from 14.0 million to 15.1 million units. Additionally, AAM discussed its strategic transaction with Dowlais, anticipated to generate approximately $300 million in synergies and significant cash flow to support deleveraging efforts. The company also emphasized its commitment to navigating tariff-related uncertainties and focusing on its core operations to maintain performance momentum.

American Axle Corporate Events

Executive/Board ChangesShareholder MeetingsBusiness Operations and Strategy
American Axle Stockholders Approve Key Governance Proposals
Positive
May 2, 2025

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.

Spark’s Take on AXL Stock

According to Spark, TipRanks’ AI Analyst, AXL is a Neutral.

American Axle’s overall score reflects moderate financial performance with challenges in profit margins and high leverage. Technical indicators are bearish, suggesting cautious short-term sentiment. Valuation appears fair, while recent strategic initiatives like the Dowlais merger present long-term growth opportunities. Earnings call sentiment was mixed, balancing operational challenges with strategic positives.

To see Spark’s full report on AXL stock, click here.

Business Operations and StrategyFinancial Disclosures
American Axle Reports Q1 2025 Financial Results
Neutral
May 2, 2025

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.

Spark’s Take on AXL Stock

According to Spark, TipRanks’ AI Analyst, AXL is a Neutral.

American Axle’s overall score reflects moderate financial performance with challenges in profit margins and high leverage. Technical indicators are bearish, suggesting cautious short-term sentiment. Valuation appears fair, while recent strategic initiatives like the Dowlais merger present long-term growth opportunities. Earnings call sentiment was mixed, balancing operational challenges with strategic positives.

To see Spark’s full report on AXL stock, click here.

Private Placements and FinancingM&A Transactions
American Axle Secures Financing for Dowlais Acquisition
Positive
Feb 24, 2025

On February 24, 2025, American Axle & Manufacturing Holdings, Inc. announced a significant amendment to its credit agreement, increasing its revolving credit facility to $1.495 billion and securing an $843 million incremental term loan B facility. This financial restructuring supports AAM’s acquisition of Dowlais Group plc, enhancing the company’s liquidity and capital structure. The successful syndication of bridge financing, including a $843 million Term Loan B and $500 million 2nd Lien Senior Secured Bridge Facility, underscores strong banking support for this transformative business combination. The acquisition is expected to expand AAM’s geographic reach and improve its market position, with anticipated cost synergies and increased revenue visibility.

M&A TransactionsBusiness Operations and StrategyFinancial Disclosures
American Axle Reports Solid 2024 Financial Results
Neutral
Feb 14, 2025

American Axle & Manufacturing Holdings, Inc. (AAM) reported its financial results for the fourth quarter and full year 2024, showing a solid growth in Adjusted EBITDA driven largely by operational performance. The company experienced a net loss in the fourth quarter, but achieved a net income for the full year 2024, reflecting a shift from a previous net loss in 2023. AAM’s sales decreased in the fourth quarter compared to 2023, impacted by volume and mix, but sales for the full year 2024 increased slightly. Looking ahead to 2025, AAM aims to optimize its core business and complete its announced combination with the Dowlais Group, projecting sales between $5.8 to $6.05 billion and an Adjusted EBITDA of $700 to $760 million.

Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.