Company Overview
Autoliv, Inc. operates as a leading supplier of passive safety systems within the automotive industry, developing and manufacturing critical components for frontal-impact airbag protection systems, side-impact protection systems, and other modules across the Americas, Europe, China, and Asia. The company is classified within the Consumer Cyclical sector and specifically functions in the Auto Parts industry, positioning it as a beneficiary of automotive sales cycles while exposing it to broader economic fluctuations. Autoliv reports a substantial market capitalization of $7.68B and generates annual revenue totaling $10.81B, supported by a workforce of 57,870 employees globally. These valuation and revenue figures indicate that Autoliv maintains a significant footprint in the global auto parts landscape, reflecting its status as a major-scale entity capable of influencing market dynamics through its extensive geographic reach and production capacity.
Financial Health
Autoliv reported a total revenue of $10.81B for the trailing twelve months, resulting in a net income of $735.00M and an EBITDA of $1.51B, a structure where the gap between revenue and net income reveals a cost base that consumes approximately 93.2% of top-line sales before accounting for interest and taxes. The company generated free cash flow of $525.50M, which provides essential financial flexibility to fund operations, service debt obligations, or return capital to shareholders without needing to raise external equity. Operating efficiency is highlighted by a gross margin of 19.2%, an operating margin of 12.2%, and a profit margin of 6.8%, where the progression from gross to profit margin illustrates the significant impact of operating expenses and other costs on final profitability. Regarding liquidity and leverage, Autoliv holds $604.00M in cash against $2.32B in debt, a position further contextualized by a debt-to-equity ratio of 89.78%, suggesting a balance sheet that carries substantial leverage relative to shareholder equity. Short-term liquidity is assessed via a current ratio of 1.04, indicating that the company's current assets barely exceed its current liabilities, which requires careful management of working capital to meet immediate obligations. Management effectiveness is further evidenced by a return on equity of 30.2% and a return on assets of 8.4%, metrics that demonstrate the ability to generate significant profits relative to the equity invested and the total asset base utilized.
Valuation Assessment
Valuation multiples for Autoliv include a trailing P/E ratio of 10.74 and a forward P/E of 8.57, implying that the market anticipates a reduction in the P/E multiple as earnings are expected to grow, thereby narrowing the gap between current and future earnings expectations. The price-to-book ratio stands at 2.98, indicating that the stock trades at a significant premium to its book value, reflecting market confidence in the company's intangible assets and future earnings potential beyond its net asset position. Alternative valuation metrics show a price-to-sales ratio of 0.71 and an EV/EBITDA of 6.20, suggesting that the company is valued conservatively relative to its sales volume and enterprise earnings power compared to peers in the auto parts sector. Price volatility over the last year is bounded by a 52-week high of $130.14 and a 52-week low of $75.49, with the current market price situated at a level that reflects recent market sentiment within this established trading range. The stock exhibits a beta of 1.34, which signifies that the share price is more volatile than the broader market, amplifying movements in both rising and falling market conditions relative to the benchmark index.
Growth & Income
Growth metrics for the company show a revenue growth rate of 7.7% year-over-year contrasted with an earnings growth rate of -4.2% year-over-year, indicating that earnings are currently growing slower than revenue, which implies that cost pressures or one-time charges are compressing profitability despite top-line expansion. As a dividend payer, Autoliv offers a dividend yield of 3.2% with a payout ratio of 32.7%, a combination that suggests the dividend is highly sustainable given that the company pays out only a fraction of its earnings while retaining the majority for reinvestment. The relatively low payout ratio allows the company to maintain dividend stability even during periods of earnings contraction, providing income stability to shareholders while preserving capital for operational needs. Overall, Autoliv presents a growth and income profile characterized by steady revenue expansion, a highly sustainable dividend yield, and a balance sheet that supports capital allocation despite current earnings headwinds.