American Axle (AXL) AI Stock Analysis

• Market Cap: $759.66M
• Dividend Yield: N/A
• Average Volume (3M): 2.61M
• Price to Earnings (P/E): 19.0
• Beta (1Y): 1.54
• Revenue Growth: -6.02%
• EPS Growth: 42.35%
• Country: US
• Employees: 19,000
• Sector: Consumer Cyclical
• Sector Strength: 84
• Industry: Auto - Parts
• EPS (TTM): 0.16
• Shares Outstanding: 118,696,420
• 10 Day Avg. Volume: 3,032,865
• 30 Day Avg. Volume: 2,611,752
• PEG Ratio: -0.10
• Price to Book (P/B): 1.22
• Price to Sales (P/S): 0.11
• P/FCF Ratio: 3.36
• Enterprise Value/Market Cap: 3.58
• Enterprise Value/Revenue: 0.47
• Enterprise Value/Gross Profit: 3.79
• Enterprise Value/Ebitda: 3.84
• 1Y Price Target: $7.03
• Price Target Upside: 9.84% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 6
• EPS Forecast (FY): 0.43
• Revenue Forecast (FY): $5.86B

• Rating: 64 Neutral
• Price Target: $6.50 ▲(1.56% Upside)

American Axle's overall stock score reflects a stable financial performance with some risks due to high leverage and declining free cash flow growth. The technical analysis suggests cautious optimism, while the valuation is moderate. The positive sentiment from the earnings call, with strong guidance and strategic initiatives, boosts the score. However, challenges in the metal forming segment and pending regulatory approvals are concerns.

Positive Factors

Strong Financial Performance

The robust EBITDA improvement reflects operational efficiency and resilience, indicating a strong foundation for future growth.

Positive Outlook for 2025

The positive sales and EBITDA guidance for 2025 underscores management's confidence and strategic focus on growth.

Successful Financing and Regulatory Progress

Securing financing and regulatory approvals strengthens AAM's market position and supports strategic expansion plans.

Negative Factors

High Leverage

Significant leverage poses financial risk, potentially limiting flexibility and increasing vulnerability to economic downturns.

Declining Free Cash Flow Growth

A decline in free cash flow growth can strain financial resources, affecting the company's ability to invest in future opportunities.

Pending Regulatory Approvals

Pending approvals could delay strategic initiatives, impacting the timeline and integration of the Dowlais acquisition.

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 contracts with original equipment manufacturers (OEMs) in the automotive industry. The company earns money by supplying critical components and systems that are integral to vehicle performance and safety. Key revenue streams include the sale of driveline and drivetrain products, which are often sold as part of long-term contracts with major automakers. Additionally, AAM benefits from aftermarket sales of replacement parts and components. Significant partnerships with major automotive brands facilitate steady revenue, while ongoing investments in technology and innovation help to maintain competitiveness and adapt to changing market demands, such as the shift towards electric vehicles.

American Axle Financial Statement Overview

Summary

American Axle demonstrates a stable financial performance with some areas of concern. The income statement reflects stable margins despite a slight decline in revenue growth. The balance sheet shows high leverage, which could be risky, but the company is generating returns on equity. Cash flow management is strong, although free cash flow growth has declined. Overall, the company maintains operational efficiency and profitability, but high leverage and declining free cash flow growth are potential risks.

Income Statement

American Axle's income statement shows a mixed performance. The TTM (Trailing-Twelve-Months) data indicates a slight decline in revenue growth at -1.62%, which is concerning. However, the company maintains a stable gross profit margin of around 12%, and the net profit margin has improved slightly to 0.70%. The EBIT and EBITDA margins are relatively stable, indicating operational efficiency. Overall, while profitability is modest, the company shows resilience in maintaining its margins.

Balance Sheet

The balance sheet reveals a high debt-to-equity ratio of 4.06 in the TTM, indicating significant leverage, which poses a risk. However, the return on equity has improved to 6.71%, showing better utilization of equity. The equity ratio stands at approximately 12.76%, suggesting a moderate level of equity financing. While the company is heavily leveraged, it is managing to generate returns on its equity.

Cash Flow

Cash flow analysis shows a decline in free cash flow growth by -26.30% in the TTM, which is a concern. However, the operating cash flow to net income ratio is healthy at 0.36, indicating good cash generation relative to net income. The free cash flow to net income ratio is 0.37, suggesting that the company is generating sufficient free cash flow relative to its net income. Despite the decline in free cash flow growth, cash flow management remains relatively strong.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	5.83B	6.12B	6.08B	5.80B	5.16B	4.71B
Gross Profit	717.90M	741.40M	624.30M	704.90M	722.70M	582.70M
EBITDA	709.80M	718.50M	664.40M	732.90M	740.70M	123.90M
Net Income	41.90M	35.00M	-33.60M	64.30M	5.90M	-561.30M
Balance Sheet
Total Assets	5.34B	5.06B	5.36B	5.47B	5.64B	5.92B
Cash, Cash Equivalents and Short-Term Investments	714.10M	552.90M	519.90M	511.50M	530.20M	557.00M
Total Debt	2.72B	2.74B	2.89B	3.13B	3.23B	3.57B
Total Liabilities	4.62B	4.50B	4.75B	4.84B	5.18B	5.54B
Stockholders Equity	718.40M	562.80M	604.90M	627.30M	457.80M	370.50M
Cash Flow
Free Cash Flow	91.30M	207.40M	201.50M	277.50M	357.20M	239.00M
Operating Cash Flow	299.00M	455.40M	396.10M	448.90M	538.40M	454.70M
Investing Cash Flow	-179.20M	-254.80M	-184.50M	-243.00M	-161.10M	-218.40M
Financing Cash Flow	-80.20M	-156.20M	-205.50M	-217.20M	-401.40M	-214.50M

American Axle Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 6.40
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: 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 6.4 is below the 20-day moving average (MA) of 6.43, above the 50-day MA of 6.27, and above the 200-day MA of 5.12, indicating a neutral trend. The MACD of 0.07 indicates Negative momentum. The RSI at 50.61 is Neutral, neither overbought nor oversold. The STOCH value of 54.37 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for AXL.

American Axle Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
VC	73 Outperform	$2.64B	8.70	23.16%	0.57%	-4.03%	-39.51%
GTX	71 Outperform	$3.39B	11.07	―	1.49%	-1.09%	56.16%
BWA	65 Neutral	$9.66B	72.38	2.24%	1.24%	0.08%	-83.69%
AXL	64 Neutral	$759.66M	19.01	6.01%	―	-6.02%	42.35%
Sector *	61 Neutral	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%
DAN	58 Neutral	$2.74B	53.17	-4.82%	1.70%	-18.23%	―
ADNT	53 Neutral	$1.53B	-5.78	-14.41%	―	-1.04%	-1510.41%

American Axle Corporate Events

American Axle Reports Strong Q3 2025 Financial Results

American Axle & Manufacturing Holdings, Inc. reported its financial results for the third quarter of 2025, highlighting a strong year-over-year margin growth. The company achieved sales of $1.51 billion and a net income of $9.2 million, with an adjusted EBITDA of $194.7 million. AAM is progressing towards its combination with Dowlais, aiming to enhance its position as a premier global driveline and metal forming supplier. The company also updated its financial outlook for 2025, targeting sales between $5.8 and $5.9 billion and adjusted EBITDA between $710 and $745 million, reflecting its strategic focus on growth and value creation.

American Axle Gains EU Approval for Dowlais Acquisition

On October 27, 2025, American Axle & Manufacturing Holdings, Inc. announced that the European Commission has unconditionally cleared its recommended offer to acquire Dowlais Group plc, satisfying the EU Antitrust Condition. The combination has been cleared in seven of the ten required jurisdictions, with clearances in Brazil, Mexico, and China expected by early 2026. The merger is anticipated to close in the first quarter of 2026, with some changes in the senior executive management team of the combined group.

American Axle Issues Notes for Dowlais Merger

On October 3, 2025, American Axle & Manufacturing, Inc. issued $850 million in senior secured notes and $1.25 billion in senior unsecured notes to finance its business combination with Dowlais Group plc. The proceeds will be used for various financial obligations, including repaying Dowlais’s credit facilities and redeeming existing notes. The issuance of these notes is a strategic move to strengthen the company’s financial position and support its growth through the pending merger, impacting its operations and market positioning significantly.

American Axle Upsizes $2.1B Note Offering for Merger

On September 19, 2025, American Axle & Manufacturing Holdings, Inc. announced the pricing and upsizing of its private offering of $850 million in senior secured notes due 2032 and $1.25 billion in senior unsecured notes due 2033. The proceeds from this offering will be used for a pending business combination with Dowlais Group plc, repayment of existing credit facilities, and other corporate purposes, potentially impacting the company’s financial strategy and market positioning.

American Axle Announces Major Note Offering for Dowlais Merger

On September 15, 2025, American Axle & Manufacturing, Inc. announced its intention to offer $843 million in senior secured notes due 2032 and $600 million in senior unsecured notes due 2033, subject to market conditions. The proceeds from this offering, along with existing credit and cash reserves, will be used to facilitate a combination with Dowlais, repay Dowlais’ existing credit facilities, and fund a change of control offer for certain Dowlais notes. This strategic financial maneuver aims to strengthen AAM’s market position and streamline its operations by integrating Dowlais, potentially impacting stakeholders through enhanced operational synergies and financial restructuring.