Overall AXL gets a fundamental rating of 3 out of 10. We evaluated AXL against 42 industry peers in the Automobile Components industry. While AXL is still in line with the averages on profitability rating, there are concerns on its financial health. AXL has a valuation in line with the averages, but on the other hand it scores bad on growth.

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1. Profitability

2. Health

3. Growth

4. Valuation

5. Dividend

1. Profitability

1.1 Basic Checks

AXL had positive earnings in the past year.
In the past year AXL had a positive cash flow from operations.
The reported net income has been mixed in the past 5 years: AXL reported negative net income in multiple years.
Each year in the past 5 years AXL had a positive operating cash flow.

1.2 Ratios

AXL has a Return On Assets (0.75%) which is in line with its industry peers.
AXL has a better Return On Equity (5.58%) than 71.43% of its industry peers.
With a Return On Invested Capital value of 4.97%, AXL perfoms like the industry average, outperforming 50.00% of the companies in the same industry.
Measured over the past 3 years, the Average Return On Invested Capital for AXL is below the industry average of 9.10%.
The 3 year average ROIC (4.62%) for AXL is below the current ROIC(4.97%), indicating increased profibility in the last year.

		Industry Rank	Sector Rank
ROA	0.75%
ROE	5.58%
ROIC	4.97%

ROA(3y)0.39%

ROA(5y)-1.64%

ROE(3y)3.42%

ROE(5y)-28%

ROIC(3y)4.62%

ROIC(5y)4.36%

1.3 Margins

AXL's Profit Margin of 0.69% is in line compared to the rest of the industry. AXL outperforms 52.38% of its industry peers.
In the last couple of years the Profit Margin of AXL has grown nicely.
AXL has a Operating Margin of 4.39%. This is comparable to the rest of the industry: AXL outperforms 54.76% of its industry peers.
AXL's Operating Margin has declined in the last couple of years.
AXL has a Gross Margin of 12.31%. This is in the lower half of the industry: AXL underperforms 73.81% of its industry peers.
In the last couple of years the Gross Margin of AXL has declined.

		Industry Rank	Sector Rank
OM	4.39%
PM (TTM)	0.69%
GM	12.31%

OM growth 3Y-7.92%

OM growth 5Y-8.14%

PM growth 3Y70.91%

PM growth 5YN/A

GM growth 3Y-4.77%

GM growth 5Y-2.62%

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ROA

ROE

ROIC

Operating and Profit Margin

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2. Health

2.1 Basic Checks

The Return on Invested Capital (ROIC) is below the Cost of Capital (WACC), so AXL is destroying value.
The number of shares outstanding for AXL has been increased compared to 1 year ago.
The number of shares outstanding for AXL has been increased compared to 5 years ago.
Compared to 1 year ago, AXL has about the same debt to assets ratio.

2.2 Solvency

Based on the Altman-Z score of 1.54, we must say that AXL is in the distress zone and has some risk of bankruptcy.
AXL's Altman-Z score of 1.54 is on the low side compared to the rest of the industry. AXL is outperformed by 69.05% of its industry peers.
AXL has a debt to FCF ratio of 16.22. This is a negative value and a sign of low solvency as AXL would need 16.22 years to pay back of all of its debts.
AXL has a Debt to FCF ratio (16.22) which is in line with its industry peers.
AXL has a Debt/Equity ratio of 3.61. This is a high value indicating a heavy dependency on external financing.
Looking at the Debt to Equity ratio, with a value of 3.61, AXL is doing worse than 85.71% of the companies in the same industry.

		Industry Rank	Sector Rank
Debt/Equity	3.61
Debt/FCF	16.22
Altman-Z	1.54

ROIC/WACC0.63

WACC7.94%

2.3 Liquidity

AXL has a Current Ratio of 1.77. This is a normal value and indicates that AXL is financially healthy and should not expect problems in meeting its short term obligations.
The Current ratio of AXL (1.77) is comparable to the rest of the industry.
AXL has a Quick Ratio of 1.43. This is a normal value and indicates that AXL is financially healthy and should not expect problems in meeting its short term obligations.
The Quick ratio of AXL (1.43) is better than 71.43% of its industry peers.

		Industry Rank	Sector Rank
Current Ratio	1.77
Quick Ratio	1.43

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WACC

Debt/Equity

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Altman-Z score

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3. Growth

3.1 Past

AXL shows a strong negative growth in Earnings Per Share. In the last year the EPS decreased by -16.67%.
Measured over the past years, AXL shows a very negative growth in Earnings Per Share. The EPS has been decreasing by -20.64% on average per year.
Looking at the last year, AXL shows a decrease in Revenue. The Revenue has decreased by -6.02% in the last year.
The Revenue has been decreasing by -1.28% on average over the past years.

EPS 1Y (TTM)-16.67%

EPS 3Y-17.85%

EPS 5Y-20.64%

EPS Q2Q%-20%

Revenue 1Y (TTM)-6.02%

Revenue growth 3Y5.9%

Revenue growth 5Y-1.28%

Sales Q2Q%0.03%

3.2 Future

Based on estimates for the next years, AXL will show a very strong growth in Earnings Per Share. The EPS will grow by 30.48% on average per year.
Based on estimates for the next years, AXL will show a small growth in Revenue. The Revenue will grow by 1.46% on average per year.

EPS Next Y-15.19%

EPS Next 2Y12.08%

EPS Next 3Y22.31%

EPS Next 5Y30.48%

Revenue Next Year-4.45%

Revenue Next 2Y-1.82%

Revenue Next 3Y-0.24%

Revenue Next 5Y1.46%

3.3 Evolution

The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
The Revenue growth rate is accelerating: in the next years the growth will be better than in the last years.

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4. Valuation

4.1 Price/Earnings Ratio

AXL is valuated rather expensively with a Price/Earnings ratio of 20.10.
The rest of the industry has a similar Price/Earnings ratio as AXL.
When comparing the Price/Earnings ratio of AXL to the average of the S&P500 Index (28.60), we can say AXL is valued slightly cheaper.
The Price/Forward Earnings ratio is 12.55, which indicates a correct valuation of AXL.
Compared to the rest of the industry, the Price/Forward Earnings ratio of AXL is on the same level as its industry peers.
The average S&P500 Price/Forward Earnings ratio is at 25.83. AXL is valued rather cheaply when compared to this.

		Industry Rank	Sector Rank
PE	20.1
Fwd PE	12.55

4.2 Price Multiples

92.86% of the companies in the same industry are more expensive than AXL, based on the Enterprise Value to EBITDA ratio.
Based on the Price/Free Cash Flow ratio, AXL is valued cheaply inside the industry as 95.24% of the companies are valued more expensively.

		Industry Rank	Sector Rank
P/FCF	5.92
EV/EBITDA	4

4.3 Compensation for Growth

AXL's earnings are expected to grow with 22.31% in the coming years. This may justify a more expensive valuation.

PEG (NY)N/A

PEG (5Y)N/A

EPS Next 2Y12.08%

EPS Next 3Y22.31%

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5. Dividend

5.1 Amount

No dividends for AXL!.

		Industry Rank	Sector Rank
Dividend Yield	0%

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AMERICAN AXLE & MFG HOLDINGS / AXL FAQ

Can you provide the ChartMill fundamental rating for AMERICAN AXLE & MFG HOLDINGS?

ChartMill assigns a fundamental rating of 3 / 10 to AXL.

What is the valuation status for AXL stock?

ChartMill assigns a valuation rating of 5 / 10 to AMERICAN AXLE & MFG HOLDINGS (AXL). This can be considered as Fairly Valued.

What is the profitability of AXL stock?

AMERICAN AXLE & MFG HOLDINGS (AXL) has a profitability rating of 4 / 10.

What is the valuation of AMERICAN AXLE & MFG HOLDINGS based on its PE and PB ratios?

The Price/Earnings (PE) ratio for AMERICAN AXLE & MFG HOLDINGS (AXL) is 20.1 and the Price/Book (PB) ratio is 1.33.

How financially healthy is AMERICAN AXLE & MFG HOLDINGS?

The financial health rating of AMERICAN AXLE & MFG HOLDINGS (AXL) is 2 / 10.