Autoliv (NYSE:ALV) is a large cap company that operates within the auto components industry. Its market cap is $13 billion today and the total one-year return is 55.13% for shareholders.
Autoliv stock is beating the market, and it reports earnings soon. But does that make it a good buy today? To answer this question we've turned to the Investment U Stock Grader. Our research team built this system to diagnose the financial health of a company.
Our system looks at six key metrics...
✗ Earnings-per-Share (EPS) Growth: Autoliv reported a recent EPS growth rate of -56.89%. That's below the auto components industry average of 5.79%. That's not a good sign. We like to see companies that have higher earnings growth.
✓ Price-to-Earnings (P/E): The average price-to-earnings ratio of the auto components industry is 21.45. And Autoliv's ratio comes in at 15.51. It's trading at a better value than many of its competitors.
✓ Debt-to-Equity : The debt-to-equity ratio for Autoliv stock is 32.17%. That's below the auto components industry average of 62.55%. That's a good sign. Autoliv's debt levels are not out of control.
✓ Free Cash Flow per Share Growth : Autoliv has increased its FCF per share over the last year relative to its competitors. That's good for investors. In general, if a company is growing its FCF, it will be able to pay down debt, buy back stock, pay out more in dividends and/or invest money back into the business to help boost growth.
✗ Profit Margins : The profit margin of Autoliv comes in at 2.29% today. And generally, the higher, the better. We also like to see this ratio above competitors. Autoliv's profit margin is below the auto components average of 8.36%. So that's a negative indicator for investors.
✗ Return on Equity : Return on equity tells us how much profit a company produces with the money shareholders invest. The ROE for Autoliv is 11.08% and that's below the industry average ROE of 17.85%.
Autoliv stock passes three of our six key metrics today. That's why our Investment U Stock Grader gives it a Hold.