Investment Thesis
Aptiv exhibits concerning profitability deterioration with razor-thin margins (0.8% net margin, 4.7% gross margin) despite flat revenue and a dramatic 89.2% EPS decline, indicating structural profitability challenges in the automotive parts sector. While free cash flow generation remains solid at $1.5B and the balance sheet shows adequate liquidity, the company's weak returns on equity (1.8%) and assets (0.7%) suggest capital is not being deployed efficiently to drive growth or shareholder returns.
APTV Strengths
- Strong free cash flow generation of $1.5B provides cushion for debt servicing and capital allocation
- Solid liquidity position with current ratio of 1.74x and $1.9B in cash reserves
- Moderate leverage at 0.83x debt-to-equity ratio with 3.3x interest coverage reducing financial distress risk
APTV Risks
- Severe profitability compression with net margin of only 0.8% and gross margin of 4.7%, indicating intense competitive pressure or operational inefficiency
- Dramatic EPS collapse of 89.2% year-over-year signals deteriorating earnings power despite stable revenue
- Minimal return on equity at 1.8% and ROA at 0.7% demonstrates poor capital efficiency and value creation
- Flat revenue growth of 0.0% YoY combined with margin erosion suggests the business faces structural headwinds
Key Metrics to Watch
- Gross margin trend - critical to identify if margin compression is temporary or structural
- Operating cash flow sustainability - ensure FCF generation can continue amid profitability challenges
- Debt reduction progress - monitor if company uses FCF to delever and reduce interest burden
- Return on invested capital - assess whether management can improve capital allocation efficiency
APTV Financial Metrics
APTV Profitability Ratios
APTV Balance Sheet & Liquidity
APTV 5-Year Financial Trend
5-Year Trend Summary: Aptiv PLC's revenue has shown modest growth of 2% over the 5-year period. The most recent EPS of $10.39 reflects profitable operations.
APTV Growth Metrics (YoY)
APTV Quarterly Performance
| Quarter | Revenue | Net Income | EPS |
|---|---|---|---|
| Q3 2025 | $4.9B | $27.0M | $0.12 |
| Q2 2025 | $5.1B | $382.0M | $1.70 |
| Q1 2025 | $4.8B | -$11.0M | $-0.05 |
Data sourced from SEC EDGAR 10-Q quarterly filings. Figures may represent quarterly or cumulative values.
APTV Capital Allocation
APTV SEC Filings
Access official SEC EDGAR filings for Aptiv PLC (CIK: 0001521332)