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Garrett Motion, Inc. (GTX)
:GTX
US Market
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Garrett Motion (GTX) AI Stock Analysis

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Garrett Motion

(NASDAQ:GTX)

Rating:66Neutral
Price Target:
$13.00
▲(11.88%Upside)
The overall score reflects Garrett Motion's strong technical momentum and attractive valuation, counterbalanced by financial instability from negative equity and high leverage. While the earnings call provided positive insights into operational improvements and strategic wins, challenges such as declining sales in specific segments and exposure to tariff risks present ongoing concerns.
Positive Factors
Financial Performance
Garrett Motion (GTX) reported first quarter sales of $878 million compared to the previously raised forecast of $843 million.
Market Position
GTX is in an industry with limited competition and highly sophisticated parts, turbochargers, which attach to engines.
Sales Growth
GTX has won several new designs and projects with existing and new customers that are expected to contribute to sales growth.
Negative Factors
Currency Exchange Impact
The increase in the Euro versus the US Dollar could result in GTX’s sales rising by as much as $100 million compared to if the Euro was at $1.05.
Sales Decline
GTX reported lower sales for the first nine months of 2024, leading to an anticipation of difficulty in achieving a slight sequential increase in sales in the fourth quarter due to the sharp decline in the Euro against the US Dollar.
Trade Uncertainties
The implications of tariffs on US imports creates several scenarios for Garrett Motion (GTX) and each situation suggests GTX is attractively priced.

Garrett Motion (GTX) vs. SPDR S&P 500 ETF (SPY)

Garrett Motion Business Overview & Revenue Model

Company DescriptionGarrett Motion Inc. (GTX) is a leading technology provider in the automotive sector, specializing in turbocharging, electric boosting, and connected vehicle technologies. With a focus on innovation, Garrett designs, manufactures, and sells advanced turbocharger and electric-boosting products for a wide range of vehicle types, including passenger cars, commercial vehicles, and off-highway equipment. The company operates globally, serving major automotive manufacturers and contributing to the development of more efficient and environmentally friendly transportation solutions.
How the Company Makes MoneyGarrett Motion makes money primarily through the sale of its turbocharging and electric boosting products to original equipment manufacturers (OEMs) and the aftermarket. The company's revenue streams are driven by its ability to provide cutting-edge technology that improves engine performance and fuel efficiency, which is increasingly in demand as global emissions regulations become more stringent. Garrett also engages in partnerships with automotive manufacturers to develop and integrate its technologies into their vehicles. Additionally, the company's focus on research and innovation allows it to maintain a competitive edge and sustain its earnings in the evolving automotive market.

Garrett Motion Earnings Call Summary

Earnings Call Date:May 01, 2025
(Q1-2025)
|
% Change Since: 26.72%|
Next Earnings Date:Jul 24, 2025
Earnings Call Sentiment Neutral
Garrett Motion demonstrated strong operational performance and innovation, reflected in growth of adjusted EBIT margins and strategic wins. However, these achievements were balanced by challenges such as a slight decline in net sales and softness in specific segments. The company maintains a resilient financial position amidst macroeconomic uncertainties.
Q1-2025 Updates
Positive Updates
Strong Adjusted EBIT Margin Growth
Garrett Motion achieved an adjusted EBIT margin of 14.9%, up 170 basis points compared to Q1 2024, reflecting significant operating improvement and cost actions.
Successful Product Launches and Innovations
Garrett secured three new wins in China and North America, expanded into new commercial vehicle programs in Europe and China, and achieved a significant milestone with the first series production award for E-Powertrain technology from Hyundai.
Cash Flow and Shareholder Returns
Garrett reported an adjusted free cash flow of $36 million and returned capital to shareholders with $30 million in share repurchases and a $12 million quarterly dividend.
Resilient Financial Position
The company ended Q1 with a liquidity position of $760 million, including $630 million of un-drawn revolving credit facilities and $130 million of unrestricted cash.
Negative Updates
Slight Decrease in Net Sales
Net sales for Q1 were $878 million, slightly down 4% on a reported basis and 2% on a constant currency basis compared to the previous year.
Diesel Application Softness
There was a decrease in diesel applications primarily driven by lower industry production in Europe, impacting overall sales.
Commercial Vehicle and Aftermarket Demand Decline
The company faced lower demand for commercial vehicles and aftermarket applications, contributing to the overall sales decline.
Exposure to Tariff Risks
Potential risks were highlighted from the new tariffs on imports into the US, though the company has been able to pass these costs through to customers so far.
Company Guidance
During the Garrett Motion First Quarter 2025 Financial Results Conference Call, the company provided detailed guidance on its financial performance metrics. Garrett reported net sales of $878 million for Q1 2025, slightly down year-over-year, yet outperforming the industry in light vehicle turbo sales, with gasoline applications growing by 6%. The company achieved an adjusted EBIT of $131 million, translating to a 14.9% margin, an increase of 170 basis points from Q1 2024. Adjusted free cash flow stood at $36 million. Garrett maintained its 2025 outlook, with projected net sales of $3.4 billion and adjusted EBIT of $457 million. Additionally, the company repurchased $30 million of common stock and declared a $12 million quarterly dividend payable in June. Despite challenges such as new tariffs, Garrett remains confident in its ability to pass through costs and maintain performance, backed by a strong liquidity position of $760 million.

Garrett Motion Financial Statement Overview

Summary
Garrett Motion shows moderate operational efficiency and stable profitability margins. However, significant financial instability due to negative equity and high leverage is concerning. Despite robust cash flow generation, inconsistent revenue growth and reliance on debt financing pose risks.
Income Statement
55
Neutral
The company's gross profit and net income have shown fluctuations over the years, with a decline in total revenue in the TTM period compared to the previous annual report. The TTM gross profit margin is approximately 26.0%, and net profit margin is around 10.1%, indicating moderate profitability. Revenue growth has been inconsistent, as seen in the recent decrease. Despite these challenges, the company maintains positive EBIT and EBITDA margins, indicative of underlying operational efficiency.
Balance Sheet
40
Negative
The balance sheet reveals significant financial leverage with a negative stockholders' equity of $700 million in the TTM period. The debt-to-equity ratio is not computable due to negative equity, which is a critical risk. However, the company has been reducing its total debt over time, which is a positive sign. The equity ratio is negative, reflecting the company's reliance on debt financing. These factors highlight considerable financial instability.
Cash Flow
60
Neutral
Free cash flow in the TTM period has remained strong at $321 million, with a positive free cash flow to net income ratio, demonstrating efficient cash generation relative to net income. The operating cash flow to net income ratio indicates solid cash flow generation from operations, although not significantly improving year-over-year. Despite healthy cash flow metrics, the company has faced fluctuating cash flow from financing activities, reflecting ongoing debt management efforts.
BreakdownTTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue3.44B3.48B3.89B3.60B3.63B3.03B
Gross Profit712.00M705.00M756.00M683.00M707.00M556.00M
EBITDA277.00M590.00M597.00M588.00M596.00M279.00M
Net Income278.00M282.00M261.00M390.00M495.00M80.00M
Balance Sheet
Total Assets2.27B2.28B2.53B2.64B2.71B3.02B
Cash, Cash Equivalents and Short-Term Investments130.00M125.00M259.00M246.00M423.00M592.00M
Total Debt1.54B1.52B1.69B1.16B1.19B1.67B
Total Liabilities2.98B2.95B3.26B2.75B3.17B5.33B
Stockholders Equity-700.00M-673.00M-735.00M-116.00M-468.00M-2.31B
Cash Flow
Free Cash Flow295.00M317.00M382.00M284.00M-382.00M-55.00M
Operating Cash Flow380.00M408.00M465.00M375.00M-310.00M25.00M
Investing Cash Flow-8.00M-14.00M-55.00M-91.00M-71.00M-80.00M
Financing Cash Flow-439.00M-520.00M-403.00M-482.00M139.00M530.00M

Garrett Motion Technical Analysis

Technical Analysis Sentiment
Positive
Last Price11.62
Price Trends
50DMA
10.88
Positive
100DMA
9.96
Positive
200DMA
9.29
Positive
Market Momentum
MACD
0.33
Negative
RSI
62.12
Neutral
STOCH
71.68
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For GTX, the sentiment is Positive. The current price of 11.62 is above the 20-day moving average (MA) of 10.96, above the 50-day MA of 10.88, and above the 200-day MA of 9.29, indicating a bullish trend. The MACD of 0.33 indicates Negative momentum. The RSI at 62.12 is Neutral, neither overbought nor oversold. The STOCH value of 71.68 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for GTX.

Garrett Motion Risk Analysis

Garrett Motion disclosed 31 risk factors in its most recent earnings report. Garrett Motion 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

Garrett Motion Peers Comparison

Overall Rating
UnderperformOutperform
Sector (62)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
VCVC
85
Outperform
$2.98B10.2225.15%-1.35%-39.06%
79
Outperform
$667.50M10.6626.52%5.15%1.14%127.04%
71
Outperform
$1.92B27.564.49%2.16%-5.44%-22.90%
GTGTX
66
Neutral
$2.35B8.98-41.90%1.03%-10.26%
62
Neutral
$16.95B11.10-7.23%3.24%1.71%-24.93%
DADAN
61
Neutral
$2.38B-2.40%3.07%-7.00%-366.59%
59
Neutral
$2.95B-0.30%23.48%97.67%
* Consumer Cyclical Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
GTX
Garrett Motion
11.62
2.20
23.35%
DAN
Dana Incorporated
16.31
4.75
41.09%
PLOW
Douglas Dynamics
28.65
4.98
21.04%
VC
Visteon
109.15
1.54
1.43%
HSAI
Hesai Group Sponsored ADR
20.86
16.21
348.60%
PHIN
PHINIA Inc.
48.12
4.53
10.39%

Garrett Motion Corporate Events

Executive/Board ChangesShareholder Meetings
Garrett Motion Confirms Directors at Annual Meeting
Neutral
May 29, 2025

On May 22, 2025, Garrett Motion Inc. held its 2025 Annual Meeting of Shareholders, where the election of nine directors was confirmed, and Deloitte SA was ratified as the independent registered public accounting firm for 2025. Additionally, shareholders approved the executive compensation plan and agreed to hold annual advisory votes on executive compensation, reflecting strong shareholder engagement and alignment with the company’s governance practices.

The most recent analyst rating on (GTX) stock is a Buy with a $15.00 price target. To see the full list of analyst forecasts on Garrett Motion stock, see the GTX Stock Forecast page.

Private Placements and FinancingStock Buyback
Garrett Motion Announces Secondary Stock Offering
Neutral
May 20, 2025

On May 20, 2025, Garrett Motion Inc. announced a secondary public offering of 17 million shares of its common stock held by entities affiliated with Oaktree Capital Management, Centerbridge Partners, and Cyrus Capital Partners. The company also plans to repurchase approximately 2 million shares as part of its existing $250 million share repurchase program. The offering and repurchase are expected to impact Garrett’s financial operations by potentially altering its share structure and providing liquidity to the selling stockholders, while the company itself will not receive any proceeds from the offering.

The most recent analyst rating on (GTX) stock is a Buy with a $15.00 price target. To see the full list of analyst forecasts on Garrett Motion stock, see the GTX Stock Forecast page.

Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

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.Date of analysis: Jul 17, 2025