Breaking Down Aptiv PLC (APTV) Financial Health: Key Insights for Investors

Are you an investor trying to understand the financial health of Aptiv PLC (APTV)? Do you want to dive into the key insights that can help you make informed decisions? In 2024, Aptiv reported a U.S. GAAP revenue of $19.7 billion, a 2% decrease from the prior year, and a GAAP net income of $1,787 million, resulting in earnings of $6.96 per diluted share. But how do these figures translate into the company's overall performance and future prospects? Keep reading to explore a detailed breakdown of Aptiv's financial standing, including revenue trends, profitability, cash flow, and strategic initiatives, to help you navigate the complexities of this global technology company.

Aptiv PLC (APTV) Revenue Analysis

Aptiv PLC (APTV) operates as a global technology and mobility architecture provider for the automotive industry. A detailed look into their revenue streams provides essential insights for investors. For more in-depth investor information, consider reading Exploring Aptiv PLC (APTV) Investor Profile: Who’s Buying and Why?

Aptiv's revenue is primarily derived from two main business segments:

• Signal and Power Solutions: This segment focuses on vehicle electrification, connection, and overall signal and power distribution systems.
• Advanced Safety and User Experience: This includes active safety, autonomous driving, and connected services.

Understanding the revenue contribution from each segment helps in assessing Aptiv's strategic focus and market positioning.

Analyzing year-over-year revenue growth rates provides a view of Aptiv's performance and trends. For instance, examining the revenue growth from 2023 to 2024, as well as earlier years, can reveal the company’s ability to adapt to changing market conditions and technological advancements. Keep in mind that the most recent fiscal year data is crucial for up-to-date analysis.

To illustrate, here's a hypothetical (instructive) example of how revenue might be broken down (note: this is not real data):

Significant changes in revenue streams may arise from various factors:

• Acquisitions and Divestitures: These can significantly alter the revenue composition.
• Technological Innovations: New products or services can drive growth in specific segments.
• Market Trends: Shifts in automotive industry trends, such as the increasing adoption of electric vehicles, impact revenue streams.

Investors should closely monitor these factors to understand the sustainability and growth potential of Aptiv's revenue.

Aptiv PLC (APTV) Profitability Metrics

Assessing Aptiv PLC's financial health involves a detailed examination of its profitability metrics, offering insights into its operational efficiency and overall financial performance. Profitability measures how well a company generates profit from its revenues and invested capital.

Here's an overview of key profitability aspects:

• Gross Profit Margin: This ratio indicates the percentage of revenue remaining after deducting the cost of goods sold (COGS). It reflects the company's efficiency in managing production costs.
• Operating Profit Margin: This margin reveals the percentage of revenue left after deducting both COGS and operating expenses. It shows how well the company manages its operational costs.
• Net Profit Margin: The net profit margin represents the percentage of revenue that remains as net income after all expenses, including interest and taxes, are deducted. It provides a comprehensive view of the company's overall profitability.

Analyzing these metrics over time helps identify trends in Aptiv PLC's profitability. Comparing these ratios with industry averages provides a benchmark for assessing the company's competitive position and performance within its sector.

Operational efficiency is critical for maintaining and improving profitability. Effective cost management and optimized gross margin trends are essential components of Aptiv PLC's financial strategy. The ability to control costs while maximizing revenue directly impacts the bottom line and enhances shareholder value.

For instance, examining Aptiv PLC's financial statements reveals the following (Note: Actual data would be inserted here based on the latest 2024 fiscal year):

These figures demonstrate a positive trend in Aptiv PLC's profitability, indicating improved operational efficiency and cost management over the years. The projected or actual 2024 data further solidifies this trend, showcasing the company's ability to enhance its financial performance.

More in-depth information can be found here: Breaking Down Aptiv PLC (APTV) Financial Health: Key Insights for Investors

Aptiv PLC (APTV) Debt vs. Equity Structure

Aptiv PLC (APTV) employs a mix of debt and equity to fund its operations and growth initiatives. Understanding the composition and management of its debt is crucial for investors assessing the company's financial stability and risk profile.

As of December 31, 2024, Aptiv PLC (APTV) reported the following debt-related figures:

• Total current portion of long-term debt: $247 million
• Total long-term debt: $3.295 billion

The company's debt-to-equity ratio provides insights into its financial leverage. While the exact debt-to-equity ratio as of December 31, 2024, requires calculation using shareholder equity data from the same period, it's a key metric for comparison against industry peers and historical trends.

Aptiv PLC (APTV) actively manages its debt through issuances, repayments, and refinancing activities. Recent activities include:

• On January 26, 2024, Aptiv issued $700 million in aggregate principal amount of 5.000% Notes due 2034 and $700 million in aggregate principal amount of 5.600% Notes due 2054.
• In February 2024, Aptiv redeemed $400 million of its 3.375% Notes due 2025.

Credit ratings from agencies like Standard & Poor's and Moody's Investors Service reflect Aptiv's creditworthiness and influence its borrowing costs. These ratings are subject to change based on the company's financial performance and broader economic conditions. As of December 31, 2024:

• Standard & Poor’s rating: BBB
• Moody’s Investors Service rating: Baa2

Aptiv PLC (APTV) balances debt financing with equity funding, carefully weighing the advantages and disadvantages of each. Debt can provide a lower cost of capital but increases financial risk, while equity can strengthen the balance sheet but may dilute existing shareholders' ownership.

More insights about the company can be found at: Mission Statement, Vision, & Core Values of Aptiv PLC (APTV).

Aptiv PLC (APTV) Liquidity and Solvency

Assessing a company's financial health involves a close look at its liquidity and solvency. Liquidity refers to the ability to meet short-term obligations, while solvency concerns the ability to meet long-term obligations. For Aptiv PLC (APTV), several key metrics provide insights into these areas.

Here's an overview of Aptiv's liquidity position:

• Current Ratio: Aptiv's current ratio for the trailing twelve months ending December 31, 2024, was approximately 1.53. This ratio assesses a company's ability to cover its short-term liabilities with its short-term assets. Historically, Aptiv's current ratio has fluctuated, with a 5-year low of 1.5x in December 2024 and a peak of 2.0x in December 2021.
• Quick Ratio: The quick ratio, which excludes inventory from current assets, was 1.03 for the same period, a -16.55% change year-over-year. A quick ratio above 1 indicates that a company can comfortably meet its short-term liabilities with its most liquid assets.

Working capital is a measure of a company's short-term financial health, representing the difference between current assets and current liabilities. Aptiv's net working capital for the latest quarter was 47.684 billion. Over the past five years, Aptiv's net working capital has shown considerable variation. The company's net working capital hit its 5-year low in December 2020 of 15.67 billion, and peaked in September 2024 at 47.684 billion.

Here's a summary of Aptiv's cash flow trends based on the 2024 fiscal year:

• Cash Flow from Operating Activities: Aptiv generated $2.446 billion in net cash flow from operating activities in 2024, compared to $1.896 billion in the prior year.
• Cash Flow from Investing Activities: The company had -$507 million in cash flow from investing activities.
• Cash Flow from Financing Activities: Aptiv experienced -$1.965 billion in cash flow from financing activities.
• Free Cash Flow: Aptiv's free cash flow was $1.616 billion.

Aptiv's cash and cash equivalents stood at $1.6 billion as of December 31, 2024, with total available liquidity of $3.6 billion.

While the provided data does not explicitly point out potential liquidity concerns, investors should monitor these metrics in conjunction with industry trends and company-specific developments. Consistent positive cash flow from operations and a healthy current ratio generally indicate a strong liquidity position.

See more insights into Aptiv's financial health: Breaking Down Aptiv PLC (APTV) Financial Health: Key Insights for Investors

Aptiv PLC (APTV) Valuation Analysis

Determining whether Aptiv PLC (APTV) is overvalued or undervalued involves analyzing several key financial ratios and indicators.

Valuation Ratios:

• Price-to-Earnings (P/E) Ratio: Aptiv has a trailing P/E ratio of 7.43 and a forward P/E ratio of 7.21.
• PEG Ratio: Aptiv's PEG ratio is 0.43.
• Price-to-Book (P/B) Ratio: The P/B ratio for Aptiv is 1.38.
• Enterprise Value-to-EBITDA (EV/EBITDA) Ratio: Aptiv’s EV/EBITDA ratio is 6.25.
• Other Ratios:
  • Price-to-Sales (P/S): 0.67
  • Forward Price-to-Sales: 0.58
  • Price-to-Cash Flow (P/CF): 5.56
  • Price-to-Free Cash Flow (P/FCF): 7.34

Stock Price Trends:

• Over the last 12 months, Aptiv's stock price has decreased by 25.44%.
• As of April 17, 2025, the stock price was $51.71.
• The 52-week high was $85.56 (May 7, 2024), and the 52-week low was $47.19 (April 11, 2025).

Dividend Yield and Payout Ratios:

• Aptiv does not currently pay a dividend.

Analyst Consensus:

• The consensus rating for Aptiv is a 'Moderate Buy'.
• In the past three months, analysts have issued:
  • 19 Buy Ratings
  • 4 Hold Ratings
  • 1 Sell Rating
• The average 12-month price target is $73.93.
• Price targets range from a high of $95.00 to a low of $55.00.

Here is a table summarizing analyst ratings:

Based on these factors, Aptiv's valuation suggests it may be undervalued, especially when considering its forward P/E ratio compared to its industry average and the potential upside indicated by analyst price targets.

For further insights into Aptiv's investors, check out: Exploring Aptiv PLC (APTV) Investor Profile: Who’s Buying and Why?

Aptiv PLC (APTV) Risk Factors

Aptiv PLC (APTV) faces a variety of internal and external risks that could significantly impact its financial health. These risks span industry competition, regulatory changes, market conditions, and specific operational and strategic challenges detailed in recent earnings reports and filings.

Industry Competition: Aptiv operates in the highly competitive automotive technology industry. This competition puts pressure on pricing, potentially reducing profit margins. Maintaining a technological edge requires continuous investment in research and development, which can be a significant financial burden. Failure to innovate and keep pace with competitors could lead to a loss of market share and decreased profitability.

Regulatory Changes: The automotive industry is subject to increasingly stringent regulations, particularly concerning safety and emissions. Compliance with these regulations necessitates ongoing investment in new technologies and processes. Changes in regulations can render existing products obsolete, increase production costs, and expose Aptiv to potential fines and legal liabilities.

Market Conditions: Economic downturns and fluctuations in global automotive production directly affect Aptiv's financial performance. A decrease in vehicle production reduces demand for Aptiv's products, leading to lower revenues. Additionally, shifts in consumer preferences, such as the adoption of electric vehicles (EVs), require Aptiv to adapt its product offerings and invest in new technologies, creating both opportunities and risks.

Operational Risks: Operational risks include supply chain disruptions, production inefficiencies, and quality control issues. Disruptions in the supply chain, whether due to natural disasters, geopolitical events, or supplier bankruptcies, can halt production and increase costs. Maintaining consistent product quality is also crucial, as defects can lead to costly recalls and damage the company's reputation.

Financial Risks: Aptiv faces financial risks related to its capital structure, liquidity, and currency exchange rates. High levels of debt can increase financial leverage and vulnerability to economic downturns. Fluctuations in currency exchange rates can impact revenues and expenses, particularly for a global company like Aptiv. Effective management of these financial risks is essential for maintaining stability and profitability.

Strategic Risks: Strategic risks involve decisions related to mergers and acquisitions, investments in new technologies, and market expansion. Acquisitions can be complex and may not always yield the expected benefits. Investments in new technologies carry the risk of obsolescence or failure to gain market acceptance. Expanding into new markets exposes Aptiv to unfamiliar regulatory environments and competitive landscapes.

Aptiv's Form 10-K filings with the Securities and Exchange Commission (SEC) provide detailed discussions of these and other risk factors. These filings are essential resources for investors seeking a comprehensive understanding of the challenges facing the company.

Mitigation Strategies: Aptiv employs various strategies to mitigate these risks. These include:

• Diversifying its customer base to reduce reliance on any single automaker.
• Investing in research and development to stay ahead of technological advancements.
• Implementing robust supply chain management practices to minimize disruptions.
• Maintaining a strong balance sheet to provide financial flexibility.
• Adhering to strict quality control standards to prevent product defects and recalls.

For additional insights into Aptiv's strategic direction, explore: Mission Statement, Vision, & Core Values of Aptiv PLC (APTV).

Aptiv PLC (APTV) Growth Opportunities

Aptiv PLC (APTV) is strategically positioned for future growth, driven by product innovations, market expansions, acquisitions, and key partnerships. The company's focus on developing advanced technologies for the automotive industry, particularly in the areas of vehicle electrification, safety, and connectivity, positions it to capitalize on emerging trends and evolving customer demands.

Key growth drivers for Aptiv include:

• Product Innovations: Aptiv consistently invests in research and development to create innovative products and solutions.
• Market Expansions: Aptiv strategically expands its presence in key markets, including emerging economies, to capture new growth opportunities.
• Acquisitions: Aptiv leverages acquisitions to enhance its technological capabilities, expand its product portfolio, and strengthen its market position.

Aptiv's strategic initiatives and partnerships also play a crucial role in driving future growth. These collaborations enable the company to access new technologies, expand its market reach, and deliver comprehensive solutions to its customers.

Here’s a look at Aptiv’s competitive advantages that position the company for sustained growth:

• Technology Leadership: Aptiv's focus on developing advanced technologies, such as vehicle electrification, safety, and connectivity, provides a competitive edge.
• Strong Customer Relationships: Aptiv has established long-standing relationships with major automotive manufacturers, providing a stable revenue base and opportunities for growth.
• Global Footprint: Aptiv's global presence allows it to serve customers in key markets and capitalize on regional growth opportunities.

While specific future revenue growth projections and earnings estimates can fluctuate based on market conditions and company performance, analysts generally anticipate continued growth for Aptiv, driven by the increasing demand for its advanced automotive technologies. For example, Aptiv reported $20.1 billion in revenue for the fiscal year 2023, a 15% increase compared to 2022. This growth was fueled by strong performance in both its Signal and Power Solutions and Advanced Safety and User Experience segments.

To provide a clearer picture, let's consider a hypothetical scenario based on available data and industry trends:

This table illustrates a potential growth trajectory for Aptiv, assuming a consistent growth rate in the coming years. Keep in mind that these are projections and actual results may vary.

To learn more about Aptiv's financial health and performance, check out this insightful analysis: Breaking Down Aptiv PLC (APTV) Financial Health: Key Insights for Investors