Investment Thesis
Aptiv is a deteriorating business facing operational stress with negative operating cash flow of -$143M despite $5.1B revenue, indicating fundamental profitability issues. Critical interest coverage of 1.0x on $9.2B debt combined with zero revenue growth and 89% EPS decline YoY signals potential debt servicing challenges ahead.
Strengths
- Strong liquidity position with current ratio of 2.11x and $3.2B cash reserves providing near-term solvency buffer
- Moderate debt-to-equity ratio of 1.0x compared to peers in automotive suppliers
- Sustained $5.1B revenue base indicating maintained market presence despite headwinds
Risks
- Negative operating cash flow (-$143M) indicates core business is not generating cash; concerning deterioration in cash conversion efficiency
- Critical interest coverage of 1.0x leaves no margin for error in debt servicing; any operational decline could trigger covenant issues
- Revenue growth flatlined at 0% YoY while EPS collapsed 89%, suggesting margin compression and operational underperformance requiring immediate remediation
Key Metrics to Watch
- Operating cash flow trend - must return to positive to validate business stability
- Interest coverage ratio - critical to maintain above 1.5x minimum safe threshold
- Revenue growth and net margin improvement - flat growth unsustainable with current cost structure
Financial Metrics
Revenue
5.1B
Net Income
189.0M
EPS (Diluted)
$0.88
Free Cash Flow
-362.0M
Total Assets
25.2B
Cash
3.2B
Profitability Ratios
Gross Margin
18.9%
Operating Margin
7.4%
Net Margin
3.7%
ROE
2.0%
ROA
0.7%
FCF Margin
-7.1%
Balance Sheet & Liquidity
Current Ratio
2.11x
Quick Ratio
1.57x
Debt/Equity
1.00x
Debt/Assets
62.2%
Interest Coverage
1.05x
Long-term Debt
9.2B
Disclaimer: This analysis is generated by AI based on publicly available SEC EDGAR filings.
It does not include stock price data and should not be considered financial advice.
All fundamental data is sourced from SEC public domain filings.
Always conduct your own research before making investment decisions.
Data Source: SEC EDGAR |
Analysis Date: 2026-05-07T08:01:18.516162 |
Data as of: 2026-03-31 |
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