With a daily gain of 4.5% and an Earnings Per Share (EPS) of 2.22, Aptiv PLC (APTV, Financial) has caught the attention of many investors. This article explores whether this stock is modestly undervalued, using a comprehensive valuation analysis. Read on to uncover insights about Aptiv PLC's potential value.
Aptiv PLC: An Overview
Aptiv PLC is a leading provider of electrical system components and advanced safety electronics for vehicles. The company's largest customers include General Motors and Stellantis, each contributing approximately 9% of its 2022 revenue. With a market cap of $30 billion and sales reaching $18.1 billion, Aptiv PLC has a significant presence in North America and Europe, which accounted for 37% and 31% of its total 2022 revenue, respectively.
The GF Value of Aptiv PLC
The GF Value is a proprietary measure of a stock's intrinsic value, calculated based on historical trading multiples, a GuruFocus adjustment factor, and future business performance estimates. This unique approach suggests that at its current price of $111.07 per share, Aptiv PLC stock is modestly undervalued. This means the long-term return of its stock is likely to be higher than its business growth.
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Financial Strength of Aptiv PLC
Before investing, it's crucial to assess a company's financial strength. Aptiv PLC's cash-to-debt ratio stands at 0.16, which is lower than 79.12% of companies in the Vehicles & Parts industry. However, with a financial strength rating of 6 out of 10, Aptiv PLC's financial condition is fair.
Profitability and Growth of Aptiv PLC
Investing in profitable companies is generally less risky. Aptiv PLC, with its profitability ranking of 8 out of 10, has demonstrated consistent profitability over the past ten years. However, its growth ranks lower than 67.04% of companies in the Vehicles & Parts industry.
ROIC vs. WACC
Comparing a company's Return on Invested Capital (ROIC) to its Weighted Average Cost of Capital (WACC) can provide insights into its profitability. For the past 12 months, Aptiv PLC's ROIC was 9.37, while its WACC was 11.13.
Conclusion
In conclusion, Aptiv PLC (APTV, Financial) appears to be a modestly undervalued investment opportunity. Despite its fair financial condition and strong profitability, its growth ranks lower than most companies in its industry. For more information about Aptiv PLC's stock, check out its 30-Year Financials here.
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