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Garrett Motion, Inc. (GTX)
NASDAQ:GTX
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Garrett Motion
(NASDAQ:GTX)
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Rating:71Outperform
Price Target:
$19.00
▲(1.71% Upside)
Garrett Motion's overall stock score is driven by strong earnings performance and positive technical indicators. While the company faces financial leverage challenges, its robust cash flow and strategic advancements in technology provide a solid foundation for future growth. The valuation is fair, and recent dividend increases enhance shareholder value.
Positive Factors
Cash Flow Generation
Strong cash flow growth indicates efficient operations and financial health, providing flexibility for investments and debt management.
Technological Advancements
Innovations in zero-emission technologies position Garrett as a leader in sustainable automotive solutions, aligning with industry trends.
Revenue Growth in Gasoline Sales
Growth in gasoline sales reflects strong demand and market share expansion, supporting long-term revenue stability.
Negative Factors
Financial Leverage Challenges
High leverage and negative equity pose risks to financial stability, potentially limiting growth and investment opportunities.
Aftermarket Segment Weakness
Weak aftermarket performance can impact overall revenue and profitability, highlighting a need for strategic adjustments.
Commercial Vehicle Segment Challenges
Challenges in the commercial vehicle segment may limit growth and require strategic focus to improve performance in this area.
Garrett Motion (GTX) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$3.53B
Dividend Yield1.49%
Average Volume (3M)2.16M
Price to Earnings (P/E)11.5
Beta (1Y)1.17
Revenue Growth-1.09%
EPS Growth56.16%
CountryUS
Employees6,600
SectorConsumer Cyclical
Sector Strength84
IndustryAuto - Parts
Share Statistics
EPS (TTM)0.42
Shares Outstanding194,482,510
10 Day Avg. Volume2,045,233
30 Day Avg. Volume2,159,906
Financial Highlights & Ratios
PEG Ratio-0.01
Price to Book (P/B)-2.98
Price to Sales (P/S)0.58
P/FCF Ratio6.33
Enterprise Value/Market Cap1.14
Enterprise Value/Revenue1.14
Enterprise Value/Gross Profit4.46
Enterprise Value/Ebitda6.90
Forecast
1Y Price Target
$20.00Price Target Upside7.07% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering4
EPS Forecast (FY)1.79
Revenue Forecast (FY)$3.68B
Garrett Motion Business Overview & Revenue Model
Company DescriptionGarrett Motion Inc., together with its subsidiaries, designs, manufactures, and sells turbocharger and electric-boosting technologies for light and commercial vehicle original equipment manufacturers worldwide. The company offers light vehicle gasoline and diesel, and commercial vehicle turbochargers; and provides automotive software solutions. It offers its products in the aftermarket through distributors. Garrett Motion Inc. was incorporated in 2018 and is headquartered in Rolle, Switzerland.
How the Company Makes MoneyGarrett Motion generates revenue primarily through the sale of its turbochargers and electric boosting solutions to OEMs and aftermarket customers in the automotive industry. The company leverages its extensive R&D capabilities to develop cutting-edge technologies that meet the evolving demands for fuel efficiency and emission reductions, which are critical in the current regulatory environment. Key revenue streams include long-term supply agreements with major automotive manufacturers and the sale of replacement parts and services in the aftermarket. Additionally, strategic partnerships with OEMs for joint development projects and collaborations on emerging technologies contribute to its earnings, as these alliances often lead to increased sales and market penetration.
Garrett Motion Earnings Call Summary
Earnings Call Date:Oct 23, 2025
(Q3-2025)
| % Change Since: |
Next Earnings Date:Feb 18, 2026
Earnings Call Sentiment Neutral
The earnings call highlighted Garrett's strong financial performance, growth in gasoline sales, and advancements in zero emission technologies. However, challenges were noted in the aftermarket and commercial vehicle segments, with an unfavorable product mix impacting margins. Despite these challenges, the company showed positive momentum in strategic areas and committed to returning capital to shareholders.Q3-2025 Updates
Positive Updates
Strong Financial Performance
Net sales for the third quarter were $902 million, up 6% at constant currency. Adjusted EBIT was $133 million with a margin of 14.7%. Adjusted free cash flow was $107 million.
Gasoline Sales Growth
Gasoline sales grew by 10% in the quarter, driven by share of demand gains.
Share Repurchases and Dividend Increase
Garrett accelerated its share repurchase activity, buying back $84 million of common stock and increased the quarterly dividend by 33% to $0.08 per share.
Advancements in Zero Emission Technologies
Secured additional proof of concepts for high-speed 3-in-1 E-Powertrain with two OEMs in Japan and China, and made progress with oil-free centrifugal high-speed compressor technology.
Improved Liquidity and Credit Ratings
Ended the quarter with a liquidity position of $862 million. Both Fitch and S&P upgraded Garrett's ratings by one notch.
Negative Updates
Aftermarket Weakness
Continued weakness in aftermarket sales, primarily in North America, affecting the overall mix.
Unfavorable Product Mix Impact
Unfavorable product mix driven by strength in light vehicle gasoline applications and weakness in commercial vehicle and aftermarket segments.
Commercial Vehicle Segment Challenges
Continued weakness in commercial vehicle sales with some regions showing signs of stabilization but overall still soft.
Company Guidance
In the third quarter of 2025, Garrett Motion delivered robust financial results, driven by a 6% rise in net sales to $902 million at constant currency, outperforming the industry with a notable 10% growth in gasoline turbo sales. The company achieved an adjusted EBIT of $133 million with a 14.7% margin, despite a 20 basis point dilution due to tariff recoveries. Adjusted free cash flow was strong at $107 million, enabling Garrett to raise its 2025 outlook midpoint. The company repurchased $84 million in common stock and increased its quarterly dividend by 33% to $0.08 per share. Additionally, Garrett secured over $40 million in awards for industrial turbochargers and anticipates sales from these products to exceed $100 million in 2025, highlighting significant growth opportunities. The company continues to advance its zero-emission technologies with new proof-of-concept awards and expects substantial efficiency gains from its E-Compressor technology.Garrett Motion Financial Statement Overview
Summary
Garrett Motion shows moderate financial performance with stable revenue growth and improved gross profit margin. However, significant leverage challenges and negative equity on the balance sheet pose financial risks. Strong cash flow generation is a positive aspect, but overall financial stability needs improvement.Income Statement
Garrett Motion shows a stable revenue growth trajectory with a 2.2% increase in TTM, despite a previous decline. The gross profit margin has improved to 21.5% in TTM, indicating better cost management. However, the net profit margin remains moderate at 9.2%, suggesting room for profitability enhancement. The EBIT margin is healthy at 13.9%, but the EBITDA margin has decreased significantly to 3.8%, highlighting potential operational inefficiencies.Balance Sheet
The company faces significant financial leverage challenges, with a negative debt-to-equity ratio due to negative equity, indicating high financial risk. The return on equity is also negative, reflecting losses relative to shareholder equity. The equity ratio is concerning, as negative equity suggests potential solvency issues.Cash Flow
Garrett Motion demonstrates strong cash flow performance with a 72% growth in free cash flow in TTM. The operating cash flow to net income ratio is robust, indicating efficient cash generation relative to earnings. However, the free cash flow to net income ratio is slightly below 1, suggesting that not all earnings are translating into free cash flow.| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 3.54B | 3.48B | 3.89B | 3.60B | 3.63B | 3.03B |
| Gross Profit | 906.00M | 889.00M | 908.00M | 840.00M | 859.00M | 676.00M |
| EBITDA | 586.00M | 590.00M | 597.00M | 664.00M | 724.00M | 286.00M |
| Net Income | 326.00M | 282.00M | 261.00M | 390.00M | 495.00M | 80.00M |
Balance Sheet | ||||||
| Total Assets | 2.44B | 2.28B | 2.53B | 2.64B | 2.71B | 3.02B |
| Cash, Cash Equivalents and Short-Term Investments | 232.00M | 126.00M | 260.00M | 248.00M | 464.00M | 693.00M |
| Total Debt | 1.52B | 1.52B | 1.69B | 1.20B | 1.63B | 1.67B |
| Total Liabilities | 3.25B | 2.95B | 3.26B | 2.75B | 3.17B | 5.33B |
| Stockholders Equity | -813.00M | -673.00M | -735.00M | -116.00M | -468.00M | -2.31B |
Cash Flow | ||||||
| Free Cash Flow | 372.00M | 317.00M | 382.00M | 284.00M | -382.00M | -55.00M |
| Operating Cash Flow | 445.00M | 408.00M | 465.00M | 375.00M | -310.00M | 25.00M |
| Investing Cash Flow | -42.00M | -14.00M | -55.00M | -91.00M | -71.00M | -80.00M |
| Financing Cash Flow | -268.00M | -520.00M | -403.00M | -482.00M | 139.00M | 530.00M |
Garrett Motion Technical Analysis
Positive
18.68
Price Trends
17.10
Positive
15.32
Positive
12.99
Positive
Market Momentum
0.50
Negative
75.01
Negative
92.59
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 18.68 is above the 20-day moving average (MA) of 17.66, above the 50-day MA of 17.10, and above the 200-day MA of 12.99, indicating a bullish trend. The MACD of 0.50 indicates Negative momentum. The RSI at 75.01 is Negative, neither overbought nor oversold. The STOCH value of 92.59 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
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
75 Outperform | $6.44B | 15.26 | 8.96% | 2.63% | -1.90% | -13.86% | |
73 Outperform | $2.71B | 8.94 | 23.16% | 0.57% | -4.03% | -39.51% | |
73 Outperform | $2.65B | 31.34 | 5.47% | 1.77% | -0.72% | -4.90% | |
72 Outperform | $8.77B | 12.97 | 40.38% | 1.07% | -4.21% | -0.45% | |
71 Outperform | $3.53B | 11.54 | ― | 1.49% | -1.09% | 56.16% | |
61 Neutral | $18.38B | 12.79 | -2.54% | 3.03% | 1.52% | -15.83% | |
55 Neutral | $3.19B | 62.00 | -4.82% | 1.70% | -18.23% | ― |
* Consumer Cyclical Sector Average
GTX
Garrett Motion
19.03
9.85
107.30%
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105.96
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-7.62%
DAN
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124.67
34.04
37.56%
VC
Visteon
99.56
15.89
18.99%
PHIN
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69.43
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42.33%
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.