Breaking Down Magna International Inc. (MGA) Financial Health: Key Insights for Investors

Breaking Down Magna International Inc. (MGA) Financial Health: Key Insights for Investors

CA | Consumer Cyclical | Auto - Parts | NYSE

Magna International Inc. (MGA) Bundle

Get Full Bundle:
$12 $7
$12 $7
$12 $7
$12 $7
$25 $15
$12 $7
$12 $7
$12 $7
$12 $7

TOTAL:



Understanding Magna International Inc. (MGA) Revenue Streams

Revenue Analysis

Magna International Inc. reported $40.8 billion in total revenue for the fiscal year 2023.

Revenue Source 2023 Revenue ($B) Percentage of Total
Body Exteriors & Structures 14.6 35.8%
Powertrain & Electrification 10.2 25.0%
Seating Systems 8.3 20.3%
Complete Vehicles 6.9 16.9%

Regional revenue breakdown for 2023:

  • North America: $22.5 billion (55.1% of total revenue)
  • Europe: $11.3 billion (27.7% of total revenue)
  • Asia: $5.8 billion (14.2% of total revenue)
  • Rest of World: $1.2 billion (3.0% of total revenue)

Year-over-year revenue growth rate:

  • 2022 to 2023 revenue growth: 5.7%
  • Compound Annual Growth Rate (CAGR) from 2019-2023: 3.2%

Key revenue performance indicators for 2023:

  • Gross Margin: 12.4%
  • Operating Income: $2.9 billion
  • Net Income: $2.1 billion



A Deep Dive into Magna International Inc. (MGA) Profitability

Profitability Metrics Analysis

Magna International Inc. financial performance reveals significant profitability insights for 2023:

Profitability Metric 2023 Value Year-over-Year Change
Gross Profit Margin 13.1% -2.3%
Operating Profit Margin 6.2% -1.5%
Net Profit Margin 4.8% -0.9%

Key profitability performance indicators:

  • Total Revenue: $41.8 billion
  • Operating Income: $2.59 billion
  • Net Income: $2.01 billion

Operational efficiency metrics demonstrate strategic cost management:

  • Cost of Goods Sold: 86.9% of revenue
  • Selling, General & Administrative Expenses: 7.1% of revenue
  • Research & Development Expenses: 5.2% of revenue
Profitability Ratio Company Value Industry Average
Return on Equity (ROE) 15.6% 12.3%
Return on Assets (ROA) 8.7% 7.2%



Debt vs. Equity: How Magna International Inc. (MGA) Finances Its Growth

Debt vs. Equity Structure Analysis

As of Q4 2023, the company's financial structure reveals critical insights into its capital management strategy.

Debt Overview

Debt Category Amount (USD)
Total Long-Term Debt $3.82 billion
Total Short-Term Debt $1.46 billion
Total Debt $5.28 billion

Debt-to-Equity Metrics

The current debt-to-equity ratio stands at 0.85, which is below the automotive industry average of 1.2.

Credit Rating Details

  • Standard & Poor's Rating: BBB
  • Moody's Rating: Baa2
  • Current Credit Outlook: Stable

Financing Composition

Financing Source Percentage
Debt Financing 45%
Equity Financing 55%

Recent Debt Activity

In 2023, the company issued $750 million in senior unsecured notes with a 5.25% coupon rate, maturing in 2028.




Assessing Magna International Inc. (MGA) Liquidity

Liquidity and Solvency Analysis

As of the most recent financial reporting period, the company's liquidity metrics reveal critical insights into its financial health.

Liquidity Ratios

Liquidity Metric Value Year
Current Ratio 1.42 2023
Quick Ratio 1.13 2023
Cash Ratio 0.35 2023

Working Capital Analysis

Working capital position stands at $1.2 billion for the fiscal year 2023, demonstrating stable short-term financial flexibility.

Cash Flow Breakdown

Cash Flow Category Amount (USD) Year
Operating Cash Flow $2.45 billion 2023
Investing Cash Flow -$1.67 billion 2023
Financing Cash Flow -$0.89 billion 2023

Key Liquidity Observations

  • Net cash generation of $890 million in 2023
  • Debt-to-equity ratio of 0.65
  • Available credit facilities of $1.5 billion

Solvency Indicators

Solvency Metric Value Year
Interest Coverage Ratio 7.2x 2023
Total Debt $4.3 billion 2023



Is Magna International Inc. (MGA) Overvalued or Undervalued?

Valuation Analysis: Is the Stock Overvalued or Undervalued?

Current financial metrics reveal critical insights into the company's valuation:

Valuation Metric Current Value
Price-to-Earnings (P/E) Ratio 11.42
Price-to-Book (P/B) Ratio 1.85
Enterprise Value/EBITDA 6.73
Current Stock Price $86.57
52-Week Price Range $64.23 - $96.41

Key valuation perspectives include:

  • Dividend Yield: 2.41%
  • Dividend Payout Ratio: 23.5%
  • Analyst Consensus: Buy Rating

Detailed analyst recommendations breakdown:

Recommendation Percentage
Strong Buy 45%
Buy 35%
Hold 18%
Sell 2%

Price momentum indicators demonstrate consistent market performance with 12-month price appreciation of 18.6%.




Key Risks Facing Magna International Inc. (MGA)

Risk Factors

The company faces several critical risk factors that could impact its financial performance and strategic positioning in the automotive supply industry.

Key Financial and Operational Risks

Risk Category Potential Impact Magnitude
Automotive Market Volatility Revenue Disruption $1.2 billion potential revenue impact
Global Supply Chain Challenges Production Delays 7.3% potential production efficiency reduction
Raw Material Cost Fluctuations Margin Compression $450 million potential cost exposure

External Risk Landscape

  • Electric Vehicle Transition Risk: 35% potential market share disruption
  • Semiconductor Supply Constraints: $620 million potential revenue impact
  • Geopolitical Trade Uncertainties: 4.2% potential international revenue volatility

Operational Risk Metrics

Risk Area Current Exposure Mitigation Strategy
Technology Investment $780 million annual R&D spend Diversified technology portfolio
Workforce Adaptation 22% workforce reskilling Continuous training programs

Financial Risk Profile

The company's risk exposure includes $2.1 billion in potential market volatility impacts and 6.5% potential earnings variability.




Future Growth Prospects for Magna International Inc. (MGA)

Growth Opportunities

Magna International's growth strategy focuses on several key areas of expansion and innovation in the automotive technology sector.

Market Expansion Opportunities

Region Projected Market Growth Key Focus Areas
North America 4.2% annual growth Electric vehicle components
Europe 5.7% annual growth Autonomous driving technologies
Asia-Pacific 6.5% annual growth Electrification solutions

Strategic Growth Drivers

  • Electric Vehicle (EV) Component Production: $3.4 billion invested in EV technology development
  • Advanced Driver Assistance Systems (ADAS): $2.1 billion allocated for autonomous driving technologies
  • Global Manufacturing Expansion: 7 new production facilities planned by 2025

Revenue Growth Projections

Year Projected Revenue Growth Percentage
2024 $42.6 billion 5.3%
2025 $45.1 billion 5.9%
2026 $47.8 billion 6.2%

Key Innovation Focus Areas

  • Electrification Technologies: 38% of R&D budget
  • Autonomous Driving Systems: 27% of R&D budget
  • Lightweight Materials Development: 18% of R&D budget

Competitive Advantages

Global manufacturing footprint spanning 28 countries with 346 manufacturing facilities.

Technology partnerships with 12 major automotive manufacturers.

DCF model

Magna International Inc. (MGA) DCF Excel Template

    5-Year Financial Model

    40+ Charts & Metrics

    DCF & Multiple Valuation

    Free Email Support


Disclaimer

All information, articles, and product details provided on this website are for general informational and educational purposes only. We do not claim any ownership over, nor do we intend to infringe upon, any trademarks, copyrights, logos, brand names, or other intellectual property mentioned or depicted on this site. Such intellectual property remains the property of its respective owners, and any references here are made solely for identification or informational purposes, without implying any affiliation, endorsement, or partnership.

We make no representations or warranties, express or implied, regarding the accuracy, completeness, or suitability of any content or products presented. Nothing on this website should be construed as legal, tax, investment, financial, medical, or other professional advice. In addition, no part of this site—including articles or product references—constitutes a solicitation, recommendation, endorsement, advertisement, or offer to buy or sell any securities, franchises, or other financial instruments, particularly in jurisdictions where such activity would be unlawful.

All content is of a general nature and may not address the specific circumstances of any individual or entity. It is not a substitute for professional advice or services. Any actions you take based on the information provided here are strictly at your own risk. You accept full responsibility for any decisions or outcomes arising from your use of this website and agree to release us from any liability in connection with your use of, or reliance upon, the content or products found herein.