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Garrett Motion (GTX)
NASDAQ:GTX
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Garrett Motion
(NASDAQ:GTX)
66Neutral
Positive Factors
Financial Performance
GTX reported first quarter sales of $878 million compared to the previously raised forecast of $843 million.
Market Expansion
GTX should have a larger share of hybrids and zero-emission commercial market.
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 Fluctuations
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.
Macroeconomic Factors
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. S&P 500 (SPY)
Market Cap
$2.20B
Dividend Yield0.55%
Average Volume (3M)1.96M
Price to Earnings (P/E)8.4
Beta (1Y)1.04
Revenue Growth-10.26%
EPS GrowthN/A
CountryUS
Employees6,600
SectorConsumer Cyclical
Sector Strength59
IndustryAuto - Parts
Share Statistics
EPS (TTM)0.36
Shares Outstanding202,619,950
10 Day Avg. Volume1,832,672
30 Day Avg. Volume1,957,085
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)0.00
Price to Cash Flow (P/CF)0.00
P/FCF Ratio0.00
Enterprise Value/Market Cap1.43
Enterprise Value/RevenueN/A
Enterprise Value/Gross Profit4.46
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$14.00Price Target Upside25.45% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering1
Garrett Motion Business Overview & Revenue Model
Company DescriptionGarrett Motion Inc. (GTX) is a global leader in providing innovative and high-quality turbocharging technologies, electric boosting, and automotive software solutions. The company operates within the automotive industry, focusing on enhancing vehicle performance, fuel efficiency, and reduced emissions across a variety of vehicles including passenger cars, commercial vehicles, and off-highway equipment. Garrett Motion's core products include turbochargers, electric-boosting technologies, and connected vehicle software.
How the Company Makes MoneyGarrett Motion makes money primarily through the sale of its turbocharging and electric boosting products to major automotive manufacturers and suppliers worldwide. The company's turbochargers are integral components in both internal combustion and hybrid vehicle engines, helping improve engine efficiency and performance. Garrett Motion also earns revenue through the licensing and sale of automotive software solutions that enhance vehicle connectivity and performance management. Key revenue streams include direct sales to OEMs (Original Equipment Manufacturers), aftermarket sales, and service agreements. Partnerships with leading automotive brands and innovation in electric and hybrid vehicle technologies significantly contribute to Garrett Motion's earnings.
Garrett Motion Financial Statement Overview
Summary
Garrett Motion shows moderate operational efficiency with stable profitability margins, but faces significant financial instability due to negative equity and high leverage. The company's cash flow generation remains robust, offering some protection against financial challenges. Overall financial health is affected by inconsistent revenue growth and reliance on debt financing, posing potential risks.Income Statement
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.55
Neutral
Balance Sheet
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.40
Negative
Cash Flow
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.60
Neutral
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 3.48B | 3.89B | 3.60B | 3.63B | 3.03B | Gross Profit |
| 705.00M | 756.00M | 683.00M | 707.00M | 556.00M | EBIT |
| 465.00M | 307.00M | 586.00M | 506.00M | 281.00M | EBITDA |
| 590.00M | 597.00M | 588.00M | 596.00M | 279.00M | Net Income Common Stockholders |
| 282.00M | 261.00M | 390.00M | 495.00M | 80.00M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 125.00M | 259.00M | 246.00M | 423.00M | 592.00M | Total Assets |
| 2.28B | 2.53B | 2.64B | 2.71B | 3.02B | Total Debt |
| 1.52B | 1.69B | 1.16B | 1.19B | 1.67B | Net Debt |
| 1.40B | 1.43B | 909.00M | 765.00M | 1.08B | Total Liabilities |
| 2.95B | 3.26B | 2.75B | 3.17B | 5.33B | Stockholders Equity |
| -673.00M | -735.00M | -116.00M | -468.00M | -2.31B |
| Cash Flow | Free Cash Flow | |||
| 317.00M | 382.00M | 284.00M | -382.00M | -55.00M | Operating Cash Flow |
| 408.00M | 465.00M | 375.00M | -310.00M | 25.00M | Investing Cash Flow |
| -14.00M | -55.00M | -91.00M | -71.00M | -80.00M | Financing Cash Flow |
| -520.00M | -403.00M | -482.00M | 139.00M | 530.00M |
Garrett Motion Technical Analysis
Positive
11.16
Price Trends
9.04
Positive
9.16
Positive
8.63
Positive
Market Momentum
0.44
Negative
78.95
Negative
93.69
Negative
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 11.16 is above the 20-day moving average (MA) of 9.18, above the 50-day MA of 9.04, and above the 200-day MA of 8.63, indicating a bullish trend. The MACD of 0.44 indicates Negative momentum. The RSI at 78.95 is Negative, neither overbought nor oversold. The STOCH value of 93.69 is Negative, 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 (61)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
79 Outperform | $566.60M | 10.37 | 22.04% | 4.81% | 0.06% | 137.74% | |
77 Outperform | $2.18B | 7.48 | 25.15% | ― | -1.35% | -39.06% | |
70 Outperform | $1.67B | 23.91 | 4.49% | 2.43% | -5.44% | -22.90% | |
66 Neutral | $2.20B | 8.41 | -41.90% | 0.55% | -10.26% | ― | |
63 Neutral | $2.13B | ― | -2.40% | 2.74% | -7.00% | -366.59% | |
61 Neutral | $6.64B | 11.67 | 3.04% | 3.98% | 2.60% | -21.24% | |
56 Neutral | $2.40B | ― | -2.44% | ― | 9.07% | 79.21% |
* Consumer Cyclical Sector Average
Performance Comparison
GTX
Garrett Motion
11.16
1.87
20.13%
DAN
Dana Holding
14.53
1.60
12.37%
PLOW
Douglas Dynamics
24.39
1.67
7.35%
VC
Visteon
80.54
-35.58
-30.64%
HSAI
Hesai Group Sponsored ADR
17.95
12.92
256.86%
PHIN
PHINIA Inc.
41.94
0.29
0.70%
Garrett Motion Earnings Call Summary
Earnings Call Date:May 01, 2025
(Q1-2025)
| % Change Since: 21.04%|
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.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.