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PHINIA Inc. (PHIN)
NYSE:PHIN
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PHINIA Inc.
(NYSE:PHIN)
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Rating:68Neutral
Price Target:
$70.00
▲(9.36% Upside)
Action:DowngradedDate:02/14/26
The score is driven primarily by stable-but-not-strong financial quality (modest, uneven margins/returns offset by solid cash generation) and strong technical uptrend/momentum. These positives are partially offset by a demanding valuation (high P/E with modest yield) and a constructive but cautious outlook that acknowledges margin headwinds and flat industry volumes.
Positive Factors
Strong recurring cash generation
PHINIA generates consistent operating cash flow (~$308–$312M) and positive free cash flow (~$188M in 2025), providing durable internal funding for R&D, capex, dividends and buybacks. Strong cash conversion supports capital returns and reduces reliance on external financing across cycles.
High-margin aftermarket business
The aftermarket segment delivers higher, steadier margins (15.8% in Q4) and benefits from an installed base and recurring replacement demand. This structural mix provides margin resilience versus cyclical OEM volumes and supports long-term profitability and cash flow stability.
Diversified strategic wins and expansion
New aerospace contracts, a CNG win in India, SKU expansion and an acquisition broaden addressable markets and reduce single-market exposure. These durable product and market expansions strengthen secular growth channels and increase exposure to higher-value, less-cyclical end markets.
Negative Factors
Modest and volatile margins
PHINIA's operating and net margins are modest and have been volatile over multiple years, constraining reinvestment and returns. Persistent subpar margins versus peers limit margin expansion potential and make earnings more sensitive to cost swings and mix shifts over the medium term.
Dependence on share gains amid flat volumes
Projected growth depends on market-share gains and mix rather than robust end-market expansion. If share gains disappoint, flat-to-declining industry volumes could lead to revenue pressure, making growth fragile and reliant on competitive wins that may take time to scale.
FX, tariffs and mix are structural margin drags
Currency swings, tariff passthrough limits and adverse product mix are recurring structural headwinds that dilute margins. These external factors can persist regionally and across product lines, compressing EBITDA conversion and making margin recovery dependent on pricing power or cost restructuring.
PHINIA Inc. (PHIN) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$2.43B
Dividend Yield1.77%
Average Volume (3M)476.93K
Price to Earnings (P/E)19.3
Beta (1Y)1.15
Revenue Growth-0.72%
EPS Growth-4.90%
CountryUS
Employees12,700
SectorConsumer Cyclical
Sector Strength84
IndustryAuto - Parts
Share Statistics
EPS (TTM)1.18
Shares Outstanding37,915,160
10 Day Avg. Volume463,618
30 Day Avg. Volume476,927
Financial Highlights & Ratios
PEG Ratio0.24
Price to Book (P/B)1.58
Price to Sales (P/S)0.72
P/FCF Ratio13.38
Enterprise Value/Market Cap1.29
Enterprise Value/Revenue0.90
Enterprise Value/Gross Profit4.22
Enterprise Value/Ebitda7.60
Forecast
1Y Price Target
$84.50Price Target Upside32.01% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering2
EPS Forecast (FY)5.85
Revenue Forecast (FY)$3.62B
PHINIA Inc. Business Overview & Revenue Model
Company DescriptionPHINIA Inc. develops and manufactures gasoline and diesel fuel injection components and systems. The company also sells products and services to independent aftermarket customers and original equipment service customers with new and remanufactured products. Its product portfolio includes a range of solutions covering the fuel injection, electronics and engine management, starters and alternators, maintenance, test equipment, and vehicle diagnostics categories. The company was incorporated in 2023 and is based in Auburn Hills, Michigan.
How the Company Makes MoneyPHINIA makes money primarily by selling fuel-system products and related technologies to vehicle and engine manufacturers (OEM channel) and by selling replacement parts through the automotive aftermarket. In the OEM channel, revenue is generated from supplying production programs with components/systems (e.g., fuel injection and associated subsystems) that are built into customers’ vehicles and engines; earnings are driven by awarded platforms/program volumes, product mix, pricing, manufacturing efficiency, and long-term supply arrangements typical of tier-one automotive supply relationships. In the aftermarket channel, revenue comes from branded replacement parts sold via distributors, retailers, and service networks; this business is generally supported by installed vehicle/engine population, brand positioning, catalog breadth, and distribution reach, and may include value-added services associated with parts and diagnostics. Additional specific details on revenue splits, named partnerships, or contract terms are null.
PHINIA Inc. Earnings Call Summary
Earnings Call Date:Feb 12, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:Apr 24, 2026
Earnings Call Sentiment Positive
The call emphasized multiple positive operational and financial outcomes — quarterly and full-year revenue growth, meaningful cash generation, strong capital returns, strategic wins (including aerospace contract expansion and new alternative-fuel business), and an improved effective tax rate. These positives were tempered by margin compression (flat full-year EBITDA and ~40 bps decline in margin), dilution from FX/tariffs/SEM inclusion, regional softness in Europe and some mix-related headwinds, and remaining one-off separation items. Management provided a constructive but cautious 2026 outlook that assumes modest organic growth supported by share gains and continued cash generation.Q4-2025 Updates
Positive Updates
Quarterly Revenue Growth
Total net sales of $889 million in Q4, up 6.7% year-over-year; excluding FX impacts and SEM contribution, revenue was up 2.3%.
Improved Profitability Metrics in Quarter
Adjusted EBITDA of $116 million for Q4, up $6 million year-over-year, with an adjusted EBITDA margin of 13% and adjusted earnings per diluted share of $1.18 vs. $0.71 prior year.
Segment Strength — Fuel Systems and Aftermarket
Fuel Systems Q4 sales of $560 million, up 7.9% with adjusted operating margin of 10.7%; Aftermarket Q4 sales of $329 million, up 4.8% with adjusted operating margin of 15.8%. Both segments delivered year-over-year growth for the third consecutive quarter.
Full-Year Revenue and Cash Generation
Full-year adjusted revenue approximately $3.5 billion (adjusted), up ~3% excluding certain 2024 contract manufacturing impacts; cash flow from operations of $312 million and adjusted free cash flow of $212 million (above guidance).
Strong Capital Return and Balance Sheet
Returned over $500 million to shareholders since the spin (repurchases and dividends); repurchased ~9.8 million shares (~21% of original share count); Q4 cash and cash equivalents $359 million, total liquidity $859 million, net leverage reduced from 1.4x to 1.3x, and $24 million of debt repaid.
Strategic Wins and Product/Market Expansion
Won third aerospace & defense contract (post-combustion fuel valve), contract extensions with global commercial vehicle OEMs, and a new CNG port fuel injector win in India; added ~5,800 new SKUs and completed first acquisition and aerospace quality certification in 2025.
Tax Rate Improvement
Moved adjusted effective tax rate from 41.5% in 2024 to 32.5% in 2025 and reduced cash taxes paid to $61 million from $94 million (with noted one-off items).
2026 Financial Outlook
Guidance for 2026: net sales $3.5–$3.7 billion (midpoint mid-single-digit growth inclusive of FX; low-single-digit excluding FX), adjusted EBITDA $485–$525 million (13.7%–14.3% margin), and adjusted free cash flow $200–$240 million; adjusted ETR guidance 30%–34%.
Negative Updates
Full-Year EBITDA Flat and Margin Compression
Full-year adjusted EBITDA of $478 million was flat year-over-year with a margin of 13.7%, a decline of 40 basis points vs. prior year.
Margin Headwinds from FX, SEM Inclusion and Mix
Q4 margin diluted by FX, inclusion of SEM, and unfavorable product mix (20 basis point decline in Q4 margin); FX and tariff effects each contributed roughly a ~20 basis point negative impact to full-year margins.
Regional and Mix Challenges
Lower sales in Europe within Fuel Systems and somewhat lower commercial vehicle sales in the Americas partially offset gains in Asia and the U.S.; unfavorable product mix pressures noted in Asia and the Americas.
Tariff Dynamics are Dilutive
Tariff recoveries contributed revenue (Q4 ~$15 million; full year ~$38 million) but are dilutive to margins and management assumes tariffs will be broadly breakeven in 2026, limiting margin upside.
One-Off and Separation Expenses
Separation-related transaction and finalization costs remain in the adjusted free cash flow bridge (noted as decreasing over time) and some 2025 tax reductions were one-offs, meaning future cash taxes may normalize higher.
Modest Near-Term Volume Outlook
Industry volumes expected to be flat to slightly down globally in 2026 (including BEV sales); company guidance growth relies on market share gains and mix shifts rather than strong underlying market expansion.
Company Guidance
PHINIA guided 2026 net sales of $3.5–$3.7 billion (midpoint ≈ $3.6B), saying this implies mid‑single‑digit growth inclusive of FX (low‑single‑digit ex‑FX) with industry volumes expected flat to slightly down globally; management noted roughly a two‑point FX benefit and assumed tariffs to be breakeven. They projected adjusted EBITDA of $485–$525 million (13.7%–14.3% margin), cited roughly 20% incremental conversion of incremental revenue to EBITDA, and gave adjusted free cash flow of $200–$240 million with an adjusted effective tax rate of 30%–34% (cash taxes run‑rate without one‑offs ~$75–$85M). Guidance excludes potential future policy or tariff changes.PHINIA Inc. Financial Statement Overview
Summary
Stable revenue with modest but volatile profitability (2025 operating margin ~7.7%, net margin ~3.7%) and returns that are below prior peaks; balance sheet leverage is moderate and improving, while operating cash flow and free cash flow are solid despite some multi-year cyclicality.Income Statement
Revenue has been relatively stable from 2021–2025 with low-to-mid single-digit movement (2025 up ~1.6% vs. 2024 down ~2.8%). Profitability is positive but mixed: gross margin improved versus 2023, yet operating profitability and net margin remain modest in 2025 (~7.7% operating margin and ~3.7% net margin) and are well below the stronger 2022 level. Net income recovered versus 2024, but the overall earnings profile shows volatility over time, which tempers the score.67
Positive
Balance Sheet
Leverage is moderate for the period, with debt running below equity and improving in 2025 versus 2024 (debt-to-equity ~0.61 vs. ~0.66). However, equity declined from 2023 to 2025, and returns on equity have been inconsistent—improving to ~8.2% in 2025 but still below the peak seen in 2022. Overall, the balance sheet looks serviceable, but not notably strong given the uneven profitability and shrinking equity base.63
Positive
Cash Flow
Cash generation is a relative strength: operating cash flow has been solid and stable across 2024–2025 (about $308–$312M) and free cash flow remains meaningfully positive (about $188M in 2025). Free cash flow did decline in 2025 (down ~22.6%), but cash conversion remains reasonable with free cash flow at roughly 60% of net income in 2025. The key weakness is variability over the longer history (including very weak free cash flow in 2021), indicating cash flow can be cyclical.70
Positive
| Breakdown | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 3.48B | 3.40B | 3.50B | 3.35B | 3.23B |
| Gross Profit | 727.00M | 726.00M | 692.00M | 722.00M | 675.00M |
| EBITDA | 437.00M | 446.00M | 433.00M | 545.00M | 424.00M |
| Net Income | 130.00M | 79.00M | 102.00M | 262.00M | 152.00M |
Balance Sheet | |||||
| Total Assets | 3.82B | 3.77B | 4.04B | 4.07B | 4.18B |
| Cash, Cash Equivalents and Short-Term Investments | 359.00M | 484.00M | 365.00M | 251.00M | 259.00M |
| Total Debt | 1.02B | 1.04B | 864.00M | 1.13B | 1.14B |
| Total Liabilities | 2.23B | 2.19B | 2.15B | 2.43B | 2.47B |
| Stockholders Equity | 1.59B | 1.57B | 1.89B | 1.64B | 1.71B |
Cash Flow | |||||
| Free Cash Flow | 188.00M | 203.00M | 100.00M | 196.00M | 1.00M |
| Operating Cash Flow | 312.00M | 308.00M | 250.00M | 303.00M | 147.00M |
| Investing Cash Flow | -132.00M | -101.00M | -150.00M | -105.00M | -140.00M |
| Financing Cash Flow | -310.00M | -96.00M | 20.00M | -185.00M | -44.00M |
PHINIA Inc. Technical Analysis
Negative
64.01
Price Trends
70.42
Negative
62.85
Positive
56.91
Positive
Market Momentum
-2.02
Positive
32.09
Neutral
6.61
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For PHIN, the sentiment is Negative. The current price of 64.01 is below the 20-day moving average (MA) of 71.12, below the 50-day MA of 70.42, and above the 200-day MA of 56.91, indicating a neutral trend. The MACD of -2.02 indicates Positive momentum. The RSI at 32.09 is Neutral, neither overbought nor oversold. The STOCH value of 6.61 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for PHIN.
PHINIA Inc. Risk Analysis
PHINIA Inc. disclosed 30 risk factors in its most recent earnings report. PHINIA Inc. 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
PHINIA Inc. Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
72 Outperform | $5.89B | 14.06 | 8.79% | 2.63% | -1.90% | -13.86% | |
72 Outperform | $2.42B | 12.87 | 13.90% | 0.57% | -4.03% | -39.51% | |
68 Neutral | $2.43B | 19.35 | 8.21% | 1.77% | -0.72% | -4.90% | |
63 Neutral | $3.32B | 11.23 | -39.65% | 1.49% | -1.09% | 56.16% | |
61 Neutral | $18.38B | 12.79 | -2.54% | 3.03% | 1.52% | -15.83% | |
59 Neutral | $3.46B | 38.91 | -2.91% | 1.70% | -18.23% | ― | |
48 Neutral | $1.55B | -17.14 | -17.47% | ― | -1.04% | -1510.41% |
* Consumer Cyclical Sector Average
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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.